Sellers seeking cash only deals are likely aware that their home is "over prices" and would not appraise for the contract price goal. Something essential to obtaining a mortgage.
So, if you are seriously considering a "cash only" transaction, you might consider adding an appraisal contingency stating the home must appraise for the contract amount and that if it doesn't your escrow money will be returned without penalty.
If this is a Short Sale then there could be several other possible reasons why the Seller wants an ALL CASH buyer.
Pam Civitillo, Realtor
Becky Borci Realty, LLC.
Paul, that really is a great question.
Let's count the reasons:
1. The process can close quickly. Cash purchases can close in days.
2. Previous sellers failed to obtain financing
3. The home may have issues that will create in inspection problem.
4. The home, due to it's eclectic community, will not appraise.
5. Local economics are keeping values artificially low
6. Other issues such as liens against the 'association' will prevent financing.
7. At the closing table, it all cash to the seller anyway.
8. Perhaps the selelr, whether you recognize it or not, is giving a real discount in exchange for a cash purchase.
9. Be aware, a seller can prohibit FHA or VA backed mortgages also. The manner in which a home is funded can have a real financial impact on the seller.
Working with a real estate professional should allow you to identify the issue in play. There are many more, however, these are the most often encountered.
Best of success in acquiring your Florida home,
ReMax Realtec Group
Palm Harbor, FL
727. 420. 4041
Your Realtor probably can shed more light on the situation.
Our last two sales were cash and they closed within 7 days.
Some areas were getting hit with a penalty on appraisals by 5% due to what they called " a high risk area". I don't think this is still happening however but it may be by some appraisers and or lenders.
As always, let us know if we can help. Love my Job!
Not that financing a purchase is bad. Most sellers will choose cash over finance due to less fuss, stress and waiting.