All Cash Contract Offers

I had a neighbor stop me the other day and ask me about an all cash offers on a contract for a second home they were trying to sell in Hawaii. Don't you wish you were the buyer given the weather here? Anyway, they  were all excited because they had a contract offer for all cash and they felt they should really give it much more attention than any other offer that might included financing. They asked my opinion.  I said Yes and No.

The Yes is always seriously consider any all cash offer. But sometimes that strategy is used by buyers to get you to take less money for the property and then once you are under contract the buyer legally switches to financing the purchase. The No is  this  all cash contract may be no better than an offer with financing , but you've possibly accepted less because you thought it was a sure thing. If  the contract offered has a appraisal contingency with it you are then bound by the appraisal and the supposedly sure thing again is no better that a contract with financing.

Okay so how do you make sure the buyer has the money to pay all cash? Ask your realtor to request the buyer's evidence of funds to close the all cash deal and if really pushed ask them to remove the appraisal contingency as a condition of the contract. Then at least you know that if you are giving them a great price they can't use the appraisal to walk away or get you to lower it more. You can also add a "as-is" condition clause to the contract so you aren't being nickled and dimed with the home inspection.

Generally all jurisdictions have contract language that allows the buyer to use alternate financing as long as they settle by the establshed and agreed upon contract settlement date and also do not cost the seller any additional expense.