When Should You Take A Cash Offer?

Start with the real comparison

People compare a cash offer to the Zestimate. That is not the comparison. The comparison is the cash offer against what you would actually net from a listing, after commission, concessions, repairs the buyer demands, and four more months of mortgage, taxes and insurance.

The four conditions that make cash the better deal

• The house needs work you cannot or will not pay for up front. A listing agent will ask for six to twenty thousand dollars of paint, flooring and roof work before photos.
• You cannot carry two housing payments. Every month of overlap is real money, and it comes out of the listing side of the ledger.
• The property is occupied by a tenant or a family member. This collapses your buyer pool to cash buyers anyway, at which point you are only choosing which cash buyer.
• Certainty is worth more to you than the last few percent. Roughly one in six New Jersey listings falls out of contract at least once. A cash close does not have an appraisal or a loan committee.

When you should list instead, and we will tell you

If the house is in good shape, in a town with fast days-on-market, you can afford to wait, and nothing in your life is forcing the timeline, list it. You will do better, sometimes considerably. We tell sellers this on the phone several times a month, and a fair number of them come back later anyway.

A worked example

A three-bedroom in Bloomfield that needs a roof, a kitchen and carpet. Listed, after prep, commission, seller concessions and five months of carrying costs, the seller nets $X in about 150 days, if it does not fall out of contract. Our cash offer was $X, in 12 days, with nothing spent up front. The difference is the price of five months and all the risk. Some sellers take that trade and some do not. Both answers are reasonable.