What does "all cash" mean?

[Anonymous]

I keep reading on this board about sellers accepting all-cash offers. What does this mean:

A. There is no financing contingency, but the buyer might still get a mortgage.
B. The buyer is paying entirely from funds available in a checking, savings, or money market account.
C. Something else -- please specify what this is.

If the answer is B, does the buyer provide a document showing that the balance is available entirely in a checking, savings, or money market account?

If the answer is A, that's not really all-cash, right? That just means that the buyer is confident that they will get financing, and so they don't need a contingency.

[Anonymous]

B

[Anonymous]

And yes, you usually have to prove that you have the funds available.

[Anonymous]

It can mean A but it's also sort of B - The buyer CAN pay entirely from funds available in a checking, savings, or money market (but doesn't have to

We had to provide documentation of funds

[Anonymous]

I used to think it was strictly B but I believe A is also what some people are referring to when they say “all cash”.

At the end of the day, is there a difference between A and B in terms of competitiveness? Do both just appear as no financing contingency?

What does a buyer need to show when dropping the financing contingency? Just the pre approval letter or account balances sufficient to cover the whole purchase price?

[Anonymous]

Anonymous wrote:I used to think it was strictly B but I believe A is also what some people are referring to when they say “all cash”.

At the end of the day, is there a difference between A and B in terms of competitiveness? Do both just appear as no financing contingency?

What does a buyer need to show when dropping the financing contingency? Just the pre approval letter or account balances sufficient to cover the whole purchase price?

You don't have to show anything to waive a contingency. Waiving financing is pretty worthless w/o the cash to back it up.

[Anonymous]

B.

A assumes the buyer still has to qualify and the funding has to go through and something could happen to cause the deal not to close causing risk to the seller.

[Anonymous]

We have a stock portfolio we can sell. This is considered cash, because it’s a one click online transaction. We can provide a bank statement.

[Anonymous]

It's always a stronger offer the waive financing contingency and an all-cash offer

[Anonymous]

I have made two all cash offers with no contingencies -- one on a townhouse in a highly desirable area of the DMV, and the other on a second home. In both instances, I provided an automatically generated letter from my brokerage firm showing that we had a larger balance in the account that we planned to use than the asking price for the house. That was the only thing that we provided, and it was deemed sufficient.

In one of the cases, we paid for the house in cash from that account but after closing immediately turned around and got ourselves a mortgage. If you do that within 60 days (I think) it's treated as a home purchasing mortgage and not as a refinance or a home equity loan. That makes the terms a little better.

[Anonymous]

Anonymous wrote:We have a stock portfolio we can sell. This is considered cash, because it’s a one click online transaction. We can provide a bank statement.

OP here. I have this also. But I'd still get a mortgage because I don't want to cash out those stocks. Didn't realize this would make me an "all-cash" buyer.

[Anonymous]

Most times there is zero advantage to it. Not sure why people talk about it so much.

If you have offers both presented without contingencies go with the highest offer. Cash or not.

Even if the appraisal comes in low, without an appraisal contingency there is no difference.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We have a stock portfolio we can sell. This is considered cash, because it’s a one click online transaction. We can provide a bank statement.

OP here. I have this also. But I'd still get a mortgage because I don't want to cash out those stocks. Didn't realize this would make me an "all-cash" buyer.

We had an all cash offer accepted. Seller wanted to delay the closing and then we asked if we could sub in a pre-approved mortgage. We made contract modifications and all was fine. I feel we needed to show bank accounts with the cash - not stock portfolios.

[Anonymous]

Anonymous wrote:Most times there is zero advantage to it. Not sure why people talk about it so much.

If you have offers both presented without contingencies go with the highest offer. Cash or not.

Even if the appraisal comes in low, without an appraisal contingency there is no difference.

+1 the seller always gets all cash. They don't care if it's from the back or from you.

[Anonymous]

B.

No mortgage is involved so no unforeseen circumstance (as in bank denies mortgage if the appraisal comes back less than the offer ...).

Yes, you have to provide bank statements with the offer.