Home Buying in Rotonda West>Question Details

paul.robinm, Home Buyer in Cape Coral, FL

Why would sellers only want cash for their home for sale?

Asked by paul.robinm, Cape Coral, FL Thu Mar 15, 2012

A home in Rotonda West, Fl

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Randy Chapman’s answer
Sellers prefer a cash buyer because banks and mortgage companies have made lending rules so strict and the process so lengthy and difficult. Also, in some cases the condition of the home may disqualify the home's eligibility for financing.
2 votes Thank Flag Link Thu Mar 15, 2012
Sometimes it's because an addition to the house does not have the proper permits.
2 votes Thank Flag Link Thu Mar 15, 2012
Cash deals generally do not contain an appraisal contingency....

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.

Good luck,

1 vote Thank Flag Link Mon Jan 20, 2014
A very big reason is because of the risk that a bank required appraisal may come in lower than the price offered for the home and in today's market most Buyers aren't will to pay more than appraised value for the home--even when there are many factors that make the home they are buying different from those to which they are being compared.
1 vote Thank Flag Link Fri Mar 16, 2012
If you decide to buy with ALL CASH just make sure to have an attorney review the title insurance policy binder and the closing paperwork.

If this is a Short Sale then there could be several other possible reasons why the Seller wants an ALL CASH buyer.
1 vote Thank Flag Link Thu Mar 15, 2012
maybe they want a quicker closing than a financed purchase would allow. Maybe they don't want to deal with the ridiculously low appraisals that occasionally come in., maybe they don't understand that with a financed offer they get all the cash due them at closing, and maybe because it is in such a condition that getting a loan would be difficult.
1 vote Thank Flag Link Thu Mar 15, 2012
Thank you! You are very helpful.
Flag Thu Mar 15, 2012
The banks lately have really been hard to work with, and if the seller has taken the home off the market several times for financing contingencies, they might be very frustrated at this point. The other reason is, and I did see a listing that said cash only. The home is in terrible condition and no bank would place their money in a vested interest like that. You would not be able to obtain home insurance on this type of home and no bank would give you a mortgage without home insurance.

Pam Civitillo, Realtor
Becky Borci Realty, LLC.
0 votes Thank Flag Link Mon Jan 20, 2014
Benifits of CASH are ongoing. My first thought is CONDITION of home may disqualify it from financing.
0 votes Thank Flag Link Fri Mar 16, 2012
That way a little bit of the uncertainty is removed. Sellers lose time when a loan is denied for any reason and then it is back to square one.
0 votes Thank Flag Link Fri Mar 16, 2012
Why would a seller what CASH ONLY for their home?
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,
Annette Lawrence
ReMax Realtec Group
Palm Harbor, FL
727. 420. 4041
0 votes Thank Flag Link Fri Mar 16, 2012
I suggest not buying a home in Florida. I got hit at the bubble, worked over by the bank, charge 5K additional to my 35K down for a declining market (I had no clue as to what that meant...) and I lost 100K in the 3 months after closing and cannot unload the property.
Flag Sun Sep 11, 2016
As for when that issue should arise--if the sellers absolutely only want cash, then it could be included in the listing. However, as I read your follow-up, you made an offer (presumably including financing) and received a counter asking for all cash. In that case, the sellers may have had some question about your ability to obtain financing. Perhaps your offer was weak in some other way. And so they countered saying, in effect, "If your offer is that weak, then we're not taking any chances and we want all cash."

Your Realtor probably can shed more light on the situation.
0 votes Thank Flag Link Thu Mar 15, 2012
Don Tepper, Real Estate Pro in Burke, VA
Marge hit it right on the head! Some sellers have already had financial fall-throughs and then they become reluctant. If the property don't appraise, the financing falls through as well. So if you're paying cash, which most of the sales are today, at least for us; have an appraisal done on the home if you're concerned with over-paying. This specific area is starting to turn around however and we've actually seen some price gains. (Modest however not falling any longer for most areas. Charlotte County)
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!
0 votes Thank Flag Link Thu Mar 15, 2012
They may be in a rush or don't want the insecurity that comes with having your buyers deal with banks.
0 votes Thank Flag Link Thu Mar 15, 2012
Cash is Fast and a SURE THING, but here's a more thorough answer to the question. http://money.cnn.com/2011/03/10/real_estate/homebuyers_payin…
0 votes Thank Flag Link Thu Mar 15, 2012
Shouldn’t they disclose that before an offer is made, and counter offer is made? I understand though, Thanks!
0 votes Thank Flag Link Thu Mar 15, 2012
Why wouldn't a seller want a cash sale? No appraisals, no lenders to potentially deny borrowers the loan, faster closing.

Not that financing a purchase is bad. Most sellers will choose cash over finance due to less fuss, stress and waiting.
0 votes Thank Flag Link Thu Mar 15, 2012
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