Posts Tagged ‘Cash Offer’
Cash buyers and cash offers are two very different things but these terms are quite often used in the house buying process so it is a good idea to know what they mean.
A ‘cash buyer’ is a buyer with the ability to make a ‘cash offer’. House buyers often refer to themselves as ‘cash buyers’ when they:
But! Many ‘cash buyers’ will never end up making a cash offer… So what is a ‘cash offer’?
If you make an offer with no conditions (an unconditional offer) then you are making a ‘cash offer’. It is not recommended that you make a cash offer unless you have completed all your due diligence regarding a house (i.e. know what you are getting into!). Due diligence can include, but is not limited to, a property valuation, building inspection, LIM, and making sure you have finance approved for that particular house for the price you are offering i.e. all the stuff that you would normally have as a condition…
Once a cash offer is accepted you have ‘gone unconditional’, skipping the period between ‘under offer’ and ‘gone unconditional’ that exists when a conditional offer is accepted. If you make a cash offer and it is accepted you have now bought a house and on the possession/settlement date you will be required to have the funds to complete the purchase.
So you may be a cash buyer – but will you ever make a cash offer? That is for you to decide…
Need to find out more about financing and making an offer – check out our Mortgages and Money section and the Propertytoolbox House Buying Guide.
- Have ‘cash’ i.e. have money in the bank and don’t need to get a mortgage, or
- Have pre-approval from their bank for lending and will not need to sell an existing house in order to buy a new one (i.e. will not need a house sale condition).