Why is a Cash Offer Better?
Have you heard the investors give you their pitch that they’ll give you an “all cash offer”? And then you wait for the other shoe to drop and find out how much below market value the “all cash offer” will be. What is it about a cash offer that merits a discount and elevated status? When I’ve asked both buyers and sellers they say , “well it’s cash and they can close fast”. However, you may have a serious buyer with a competitive offer that wants to stand out from the crowd. So it is important to understand the contractual benefits of a cash purchase. To find out, watch the video below:
How is the Residential Contract affected by a Cash Offer?
Since the Arizona Residential Contract specifies the terms and conditions of the purchase, it is necessary to understand how a cash offer is treated in the contract. The essence is it removes two contingencies; the unfulfilled loan contingency and the appraisal contingency. The contract states that a buyer can cancel the contract and receive a refund of their earnest money if after a diligent and good faith effort they are unable to obtain loan approval. This is NOT referring to the pre-qualification. The loan approval is dependent on the underwriter. Another contingency that is frequently removed is the appraisal contingency. Since there is no loan, an appraisal is not required, unless it is agreed upon by both parties. Watch the video for more information.
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