Real NEastate: Some sellers prefer cash offers


Q: I found a house for a really good price in Parkwood so I put a full price offer in but my agent told me I didn’t get it. I couldn’t believe it when he told me the seller took another offer for less money because it was a cash offer. Why would someone take cash over a mortgage? What’s the difference? Money is money. They walk away with a check either way. It’s all the same!


A: Money is money whether it comes from a cash buyer or a mortgage lender. (That is to say, if the seller doesn’t owe all of the proceeds to their own mortgage company). And many times sellers will go with the higher offer. Sometimes; however, there may be other factors influencing the seller’s decision.

A seller may prefer the cash offer over a mortgage, even if it’s higher, if they are worried about some conditions in the Agreement of Sale. When weighing the options, sellers will sometimes ask the following questions:


  1. Q: If it is an FHA mortgage does that mean I will have to do repairs? A: If it is FHA, the answer is probably. And the repairs will likely cost some money.
  2. Q: Is the cash settlement date sooner than the mortgage settlement date? A: Usually a cash offer will settle sooner because they’re not waiting for the mortgage to come through, which could take over a month.
  3. Q: Is it worth the extra money if there’s a chance the buyer’s mortgage company could pull out if something doesn’t work for them? A: Maybe. Maybe not.

There are more reasons a seller might prefer cash over a mortgage. Maybe the seller wanted to get out of the property fast and/or maybe the seller is a bank that doesn’t want to take chances on another mortgage. It happens, but not all the time.


Good Luck!

Stacey McCarthy is a real estate agent with the McCarthy Group of Keller Williams. Her Real NEastate column appears every Wednesday on See others here. Read other NEast Philly columns here.


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