The Misunderstood Appeal of Cash Offers

Show Me The Money!  Cash offers…

Some people just don’t understand what makes cash attractive to home sellers. Consider these stories.

A man recently made a verbal cash offer on one of our Tacoma home listings. He didn’t merely want to close the sale with cash; this guy wanted to bring the seller a suitcase full of money in person – a literal cash offer. He then made vague comments about doing things “off the books”. It was weird. The seller elected to pass and consider some of the other offers on the table.

I believe he misunderstood what makes cash so appealing, thinking perhaps no seller can resist the sight and smell of cold hard cash – like their eyes turn into cartoon dollar signs, blinding them to all else.

No Financing Contingency

Earlier this month we received four offers on a north end Tacoma home. One of them was cash. This time I am not talking about a suitcase full of money. The buyer’s offer was cash in the sense that she was not asking for a loan contingency. The funds would be transferred by wire on the closing date. Her plan was to pull the money from her mutual funds then refinance into a mortgage after closing. She did this for a competitive advantage. Later she can refinance and put the money back into mutual funds while enjoying historically low mortgage rates, not to mention the mortgage interest deduction for taxes. Her offer prevailed even though it was similar in price to the others. This worked not because the seller’s eyes changed to dollar signs, but because the seller felt there were fewer potential bumps in the road to closing.

Less Risk


The true appeal of a cash offer is the removal of risk. With cash, there is no 30 day financing contingency during which a buyer might fail to qualify and back out. With cash, there is no potential for a low appraisal because there is no lender requiring one. Lastly, cash sales can close very quickly since there is no waiting for a bank loan to be approved… or to not be approved!  A fast closing importantly gives the universe less time to throw a curveball, as the universe is apt to do. People get sick, or get well, they die, they give birth, get married, divorced, and on and on… Those things tend to cause plans to change. So again, less risk!

Not everyone has a big mutual fund (or a suitcase full of cash). But those who do can potentially gain an edge in a multiple offer situation.

Looking for other ways to make your offer attractive?  Try personal letters to the seller. 


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