Yes there is a catch. It is a Red Flag!
It is one thing to prefer cash but quite another to only accept cash.
1. The building can not get financing
2. The seller priced the property too high and knows it won't appraise and knows a lender will not loan at the sale price.
As an all cash buyer, you will lose your deposit unless you have a financing contingency. It is in the seller's best interest. There are advantages to a buyer that can pay all cash but not when it is required unless it is being sold below market value.