Cash offer vs. financed offer

With a cash offer, the buyer isn't waiting on a lender. There is no loan approval to fall through and no lender appraisal that could come in low. That usually means fewer things can go wrong and a faster closing, sometimes in a couple of weeks.

Some cash buyers still ask for an inspection or their own appraisal, so read the contingencies before you assume the deal is risk-free.

A financed buyer needs a mortgage to close. Their lender will verify income and assets, review the home's title and usually order an appraisal. That process often takes several weeks.

The main risks for you are a loan that doesn't get approved and an appraisal that comes in below the price. A financing contingency usually lets the buyer cancel if their loan falls through.

• A full pre-approval, with income and assets already reviewed
• A larger down payment, which gives more room if the appraisal is low
• Appraisal gap coverage, where the buyer agrees to cover some or all of a shortfall
• A larger earnest money deposit
• Shorter contingency deadlines and a flexible closing date

• Can you show proof of funds, such as a recent bank or brokerage statement?
• Will you waive the appraisal and financing contingencies in writing?
• Is any of the money coming from a loan or the sale of another home?
• What closing date works for you?

Sometimes it makes sense. If you need to move quickly, are buying your next home on a deadline or have a home that may not appraise well, certainty can be worth a lower price.

If the financed offer is higher and the buyer is well qualified, you may come out ahead by taking it. Ask your agent to estimate what you'd net from each offer, after concessions and costs, so you can see the real difference.

A listing agent can review proof of funds, call the buyer's lender to check the pre-approval and help you weigh the risks. Where CapCenter offers realty services, our agents can walk you through each offer side by side.