In real estate, cash buyers quickly close the deal

Aren’t sellers rolling out the red carpet for homebuyers these days?

Yes, buyers are valuable, say experts, but some are being afforded extra-special consideration from anxious sellers.

When a buyer offers to pay cash — and a whopping 35 percent of home purchases in March were cash transactions — sellers are bending over backward to take that offer.

“If there are two purchase contracts, one for cash and one where the buyer needs financing,” said Paul Wells, broker and owner of RE/MAX in Barrington, “the seller is going to give extra weight to the cash buyer.” Indeed, Wells says that he’s seen sellers refuse offers that are 10 percent higher but which involve financing, taking instead the cash bid.

Cash is king, adds John Lazar of Century 21 M& M and Associates, Turlock, Calif., because buyers relying on financing can hit many snags, including the amount that’s been offered being deemed too high by the lender’s appraiser.

Wells, who himself also buys investment properties, says many fellow investors prefer to use cash because it lowers the overall cost of the property. “The fees and interest charges on a mortgage make [the property] more expensive,” he said.

From a seller’s perspective, once a sale is closed “it really doesn’t matter how the property was financed,” Lazar said. But it’s the uncertainty that a buyer will actually be able to get financing in time for the scheduled closing of the sale that makes cash buyers more desirable.

Still, Wells says, buyers needing a mortgage can strengthen their chances against cash bidders by securing pre-approval for a mortgage of a certain amount. “I’ve also seen buyers who appeal to a seller’s emotions — by writing them a letter outlining how much their family would like to live in the home.”