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\n <\/div>\n \n Find Cash Buyers and Top Agents Near You<\/h3>\n
HomeLight\u2019s Simple Sale platform can connect you with a nationwide network of trusted cash buyers, including fix-and-flip and buy-and-hold investors. You’ll also get an estimate of what a top agent might be able to get for your home so you can compare options.<\/p>\n \n
If you\u2019re looking to buy a home, you\u2019ve probably heard that cash is kind of a big deal in real estate. All-cash offers<\/a> are beloved by sellers and real estate agents alike \u2014 and they\u2019re more than three times as likely to be chosen<\/a> from the pack.<\/p>\n In 2023\u2019s market, many buyers using a mortgage have been dissuaded by elevated interest rates, with cash buyers unaffected by interest rates still in the market. According to HomeLight\u2019s 2023 New Year Insights Report, cash offers have an advantage in this market<\/a>.<\/p>\n Top New York real estate agent Christine Marchesiello<\/a>, who works with over 70% more single family homes than the average Saratoga Springs<\/a> agent, agrees that she\u2019s seen cash offers explode over the last year or so.<\/p>\n \u201cLast year we sold approximately 200 homes, and I would say about 25% of those were cash. And that may not seem like a huge number, but it\u2019s definitely<\/i> an increase,\u201d she stresses. \u201cIn the past, it may have been 5%.\u201d<\/p>\n That\u2019s not all that\u2019s changed in the last few years for buyers contemplating cash. Thanks to a highly competitive and booming real estate market, cash transactions are now slower than ever (more on that soon!), and making an all-cash offer no longer necessarily means you\u2019ll get a discount on home price, despite our sad story above.<\/p>\n Still, paying in cash gives the buyer a few distinct advantages at today\u2019s offer table: Namely, removing the uncertainty of a mortgage approval<\/a>, and skipping the appraisal altogether if desired.<\/p>\n \u201cThe appraisal \u2014 that’s really where the key is because the appraisal can throw the entire transaction,\u201d explains Marchesiello. \u201cWhen you have this type of market and you have 14 offers on a property, all you\u2019re doing as the listing agent is looking to minimize the unknown. You\u2019re looking for the surest thing.\u201d<\/p>\n Appraisals, which are required for mortgage-backed offers, continue to be a thorn in the side of both sellers and buyers. In 2021, a record number of appraisals came in below the contract price<\/a>, pushing sellers to seek out cash offers wherever possible.<\/p>\n Even though so much has changed, sellers still see cash as a sure thing \u2026 but is it? Not always! Cash purchases, too, can get held up by a range of potential delays.<\/p>\n \u201cWait a minute,\u201d you\u2019re probably thinking. \u201cWhy would you run into financing issues if you\u2019re buying a home in cash?\u201d<\/p>\n Financing can still cause a delay, even when it comes to cash! Maybe you aren\u2019t using a loan, but you can still run into cash flow issues.<\/p>\n For example, let\u2019s say the stock market crashes, and your 401(k) loses a huge amount of value overnight. You were planning to take money out of the account to cover your cash purchase. Suddenly, you have less money than you realized. This could be an issue when using investments in general \u2014 things can change quickly!<\/p>\n Another issue that can come up is when a buyer wires money to the wrong account (imagine the horror!). This can hold up the deal while the situation is investigated and resolved by the financial institutions involved. And unfortunately, in some cases, the money may not be recoverable, putting the deal in jeopardy entirely.<\/p>\n Wiring can take longer than some buyers realize, and the timing depends on the financial institution.<\/p>\n \u201cPeople think that a wire from their financial institution \u2014 it might be a stock trading institution or a foreign bank \u2014 they assume that all wire transfers take the same amount of time,\u201d reveals Jordan Clarke<\/a>, a top California agent who completes 13% more transactions than the average Carlsbad<\/a> agent.<\/p>\n \u201cI\u2019ve had clients wire money from China, and then be surprised that it takes 7 days to get here. Or, even from a brokerage trading house, that it takes 10 or 14 days once the wire\u2019s initiated for the money to get to the escrow company.”<\/p>\n Needless to say, if you told the seller the money would be available on say, June 14, and you initiate the wire transfer on that day \u2014 only to find out it could take two weeks for the money to arrive \u2014 it could put your closing timeline in jeopardy.<\/p>\n And since closing quickly is one of the biggest perks of having a cash offer in the first place, it\u2019s a good idea to make sure your cash can clear in time to stay on the seller\u2019s timeline.<\/p>\n Make sure to check with your financial institutions to ask how long wire transfers typically take. You don\u2019t want a simple oversight to hold up the deal on your dream home.<\/p>\n One of the big benefits of cash that\u2019s constantly touted is that it allows you to remove contingencies from the deal<\/a>.<\/p>\n Contingencies are clauses in real estate contracts<\/a> stipulating that certain conditions must be met before the deal can close.<\/p>\n Real estate contract contingencies are commonly associated with getting a mortgage, as lenders tend to do their due diligence on a property before they\u2019ll put up the money for it.\u00a0 Financing and appraisal contingencies give the buyer an out if their lender determines that it will not finance the property, based either on the loan underwriting or the results of the appraisal.<\/p>\n For example, a financing contingency is typical for those using a mortgage, and it basically says the buyer\u2019s financing has to clear before the transaction can be completed. Makes sense, right?<\/p>\n With cash, buyers are able to waive common contingencies, making the deal smoother and faster (not to mention sweeter for the seller).<\/p>\n However, an inspection contingency will often be used by any buyer, whether they\u2019re using financing or paying cash. An inspection contingency basically states that if material issues come up during the inspection, the buyer can back out of the contract (or they have the option to try to renegotiate with the seller).<\/p>\n Home inspections are typically optional, though they\u2019re very common \u2014 and encouraged, with most buyers getting one<\/a>.<\/p>\n Waiving the inspection contingency might seem<\/i> like a great way to strengthen your offer<\/a> and hurry the deal along, but it can put you at risk, and it\u2019s not a tactic that\u2019s generally recommended by experienced real estate agents<\/a> (or anyone in the industry, really).<\/p>\n All of that is to say: You\u2019ll probably want an inspection and<\/i> an inspection contingency, even if you\u2019re paying in cash. But understand that inspections can delay the deal.<\/p>\n For example, let\u2019s say the inspection reveals that your would-be home has substantial foundation issues<\/a>, or the roof needs replacing, or the electric system is in bad shape and needs to be rewired. These are all major repairs that can add up quickly. And if your offer didn\u2019t reflect these needed repairs, you could end up overpaying for the home.<\/p>\n Depending on how negotiable the seller is, or how willing they are to take on repairs, these findings could majorly hold up your home purchase.<\/p>\n Prior to 2020, a cash deal could close in as few as 7 days, while financed home purchases took an average of around 45 days to close<\/a>.<\/p>\n These days, cash isn\u2019t quite as quick and painless as it used to be. The cash closing process can often take three or more weeks, depending on the availability of third-party services.<\/p>\n \u201cIt used to be faster to close cash. It\u2019s actually slower now because the industry is so overwhelmed and busy,\u201d Marchesiello shares.<\/p>\n \u201cYes, the cash helps out in terms of the bank and being able to move quickly because you eliminate the bank. But you still have a big slow down when it comes to attorneys and title searches and all that being backlogged.\u201d<\/p>\n The bottom line: You\u2019re only as quick as the third-party services you use. Title companies, attorneys, and inspectors may have delays as they try to serve more buyers than ever.<\/p>\n Speaking of the title, one major threshold you\u2019ll have to cross before buying a home is the title search<\/a> \u2014 and you\u2019ll likely have to do a title search whether you\u2019re paying in cash or financing.<\/p>\n With a title search, a title company looks into the property\u2019s title (in other words, who has legal ownership of the home) to make sure there aren\u2019t outstanding liens on it, or taxes owed, or any missing heirs that could threaten your ownership of the home.<\/p>\n Basically, the title search is to make sure that once the home changes hands and belongs to you, no one else can interfere with your claim to it, and only you have the right to sell it.<\/p>\n However important title searches are, they can reveal issues that delay closing.<\/p>\n Clarke explains that title issues can hold up even all-cash deals: \u201cThere might be an encumbrance on the property that wasn\u2019t discovered until the very last second that has to be taken care of,\u201d he shares.<\/p>\n Further, Clarke explains, delays can come up while recording the deed to your new home:<\/p>\n \u201cYou can have problems down at the recording office, where the paperwork that title sent down wasn\u2019t to the satisfaction of the recording office, which causes a delay,\u201d he adds.<\/p>\n The truth is, these little processes all add up, and they can have a big impact on your final closing timeline if things don\u2019t go as planned.<\/p>\n Documentation issues can and do delay closings from time to time. For example, let\u2019s say the home you\u2019re buying is part of an HOA, yet the seller doesn\u2019t get you the HOA documents you need to review \u2014 and sign \u2014 before closing. This could hold up the deal.<\/p>\n Further, escrow companies tend to handle a lot of the documentation and paperwork on home purchases. This is another area where errors can happen, prolonging your closing timeline.<\/p>\n \u201cYou can have escrow work not completed in time by either side, or even the escrow company themselves,\u201d Clarke cautions.<\/p>\n Tax issues can also cause closing delays, even with a cash deal. Basically, if you owe the government taxes, or you owe child support, it can interfere with your ability to close.<\/p>\n \u201cIf buyers have any tax lawsuits, or taxes they haven\u2019t paid, or child support that pops up on their credit report,\u201d it can cause closing delays, according to Ramon Sanchez<\/a>, a top California agent who works with over 77% more single-family homes than the average Long Beach<\/a> agent.<\/p>\n \u201cIf that pops up in your SI \u2014 which is your statement of information \u2014 that\u2019s a red flag. You need to rectify that before you can close a deal,\u201d he explains.<\/p>\n The final walkthrough<\/a> is often thought of as a formality, but it\u2019s actually pretty important, and it can have repercussions for your closing.<\/p>\n For example, let\u2019s say during the final walkthrough, you notice<\/a> that several appliances you negotiated to be included in the purchase were removed from the home. Or perhaps when the seller was moving out, they accidentally damaged the brand-new wood floors.<\/p>\n These unexpected findings could cause a delay in your timeline as you work with the seller to resolve any issues that come up during the final walkthrough.<\/p>\n More than half of buyers are surprised by the amount of their closing costs<\/a> when it comes time to seal the deal on a new home. Hopefully, you already factored in closing costs \u2014 which can tack on between 2% and 5%<\/a> to your new home\u2019s purchase price.<\/p>\n If you\u2019re paying all-cash, you can avoid lender fees<\/a>, which should save you some money on closing costs. But even for cash buyers, closing costs can add up to around 3%<\/a> of the purchase price. And you\u2019ll need to have the closing cost cash available at closing.<\/p>\n If you, or the seller, didn\u2019t budget for closing costs, or one of you can\u2019t cover them for whatever reason, it could end up delaying your purchase until the payments get sorted.<\/p>\n If you\u2019re an investor purchasing a rental unit, tenant issues could potentially hold up closing. For example, if you agreed with the seller that the tenants should be out by closing, yet the tenants are still inhabiting the building, that could bring up contract issues.<\/p>\n Tenants have extensive legal protections and are usually allowed to stay in a unit until the lease term is completed. This could cause hiccups when it comes to your closing.<\/p>\n Make sure you carefully understand all the tenant lease agreements and do your due diligence with your agent before buying an occupied rental property.<\/p>\n A property survey<\/a> is a document that lays out your property lines and everything that\u2019s included within it \u2014 land, structures, natural features, and other noteworthy elements. Think of it as an official map of the property.<\/p>\n Many mortgage companies require property surveys (though they\u2019re not always required). The lender wants to make sure they\u2019re getting what they pay for, and not properly surveying the land could represent a risk to their investment.<\/p>\n For example, the seller may believe their lot is an acre, but a survey could reveal it\u2019s actually 0.75 acres. Or the survey could reveal that the home is actually located on the neighbor\u2019s<\/i> property, meaning the buyer wouldn\u2019t really own the home! This situation could represent a risk to a lender, and they probably wouldn\u2019t want to make a loan on a home the neighbor technically owns.<\/p>\n Sometimes sellers take it upon themselves to do a survey, but it\u2019s usually at their discretion if they choose to.<\/p>\n If you\u2019re a cash buyer, you can typically choose whether or not to do a survey. Not doing one could represent a risk to your new purchase. But doing a property survey could also potentially delay closing.<\/p>\n For example, if the lot is smaller than you believed it was when you made the offer, you may want to renegotiate with the seller. This could push back your closing date.<\/p>\n But the good news is, the property survey can protect you from making a bad investment, so it still may be a good idea.<\/p>\n Always consult with your agent and make sure you\u2019re doing everything you can to protect yourself and your hard-earned cash.<\/p>\n Let\u2019s face it: Life isn\u2019t always predictable, and unexpected things can happen. For example, let\u2019s say you get laid off from your job because of the coronavirus. That same week, your car breaks down, and the repair costs add up to more than it\u2019s worth. Now you\u2019re out of a job and<\/i> you need a new car, all while you\u2019re scheduled to buy a home in cash next week.<\/p>\n At this point, you may no longer think using such a large amount of cash is your best option. What if it takes you a long time to find comparable work? And how will you replace your car?<\/p>\n Perhaps that cash would be better used to give you a cushion while you find work. Depending on your financial situation, maybe you could use some of it as a down payment<\/a> on a home, and get a mortgage<\/a> instead.<\/p>\n Of course, if you back out of the deal<\/a>, you could lose your earnest money deposit<\/a>, so make sure to weigh your options carefully and talk to your agent should the unexpected happen. A program like HomeLight Cash Offer<\/a> might help you meet the seller in the middle, presenting a cash offer but still allowing you to finance the purchase as the buyer.<\/p>\n Nobody wants a closing delay, but when it comes to the biggest financial transaction of your life \u2014 it\u2019s far better to be safe than sorry!<\/p>\n Header Image Source: (Natee Meepian \/ Shutterstock)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Sellers see cash as a sure option, but there\u2019s still a lot that can go wrong. Top experts explain common delays in the cash closing process.<\/p>\n","protected":false},"author":123,"featured_media":31370,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"cybocfi_hide_featured_image":"","footnotes":""},"categories":[192,701,646],"tags":[797],"class_list":["post-19765","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-for-buyers","category-buyer-closing","category-making-offers","tag-how-to-buy-a-house-with-cash"],"acf":[],"yoast_head":"\n![\"\"](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2022\/05\/closing-in-cash-01-775x1232.jpg\")
<\/a><\/p>\nBackground: The cash buying process<\/h2>\n
1. Financing issues<\/h2>\n
Wiring money can take time more time than buyers realize<\/h3>\n
2. Problems come up during inspection<\/h2>\n
3. Third-party delays<\/h2>\n
4. The title isn\u2019t clear<\/h2>\n
5. Issues with recording the deed<\/h2>\n
6. Documentation delays<\/h2>\n
7. Taxes are past due<\/h2>\n
8. Problems emerge at final walkthrough<\/h2>\n
9. Not enough money for closing costs<\/h2>\n
10. Tenant issues<\/h2>\n
11. Property survey<\/h2>\n
12. Unforeseen circumstances<\/h2>\n