The Pros and Cons of Making an All Cash Offer in Boston

Are you weighing if you should buy a home or condo in Boston with an all-cash purchase? Congratulations! Not all homeowners have the luxury to purchase their Boston home with the peace of mind that comes with directly buying a home instead of using a bank-financed mortgage.

Boston is home to some of the most expensive real estate on the east coast, and the competition in the current market is fierce. With limited inventory triggering bidding wars in Downtown Boston neighborhoods and suburban towns, home buyers and real estate investors alike are vying for the same properties.

While buying a home all-cash can secure a deal more easily, selling to a Boston cash home buyer offers advantages such as reduced closing costs, no need for repairs, and faster closing times. There are some pros and cons that come with showing up to closing with the full purchase price in cash for a property.

Buying a property all-cash means that a buyer can purchase a home or condo without needing a bank to finance a mortgage. Cash companies that buy homes in Boston provide quick offers, often at lower percentages of property values, making them an attractive option for sellers looking to bypass traditional selling hassles.

"Sellers prefer all-cash buyers as they’re seen as financially stable, as opposed to buyers using a bank-financed mortgage," notes Greg Cumings, General Manager of the Greater Boston Area for Prevu Real Estate. "Buyers using a mortgage are subjected to the due diligence of bank underwriting to vet their ability to borrow, and risk not being approved for their loan if they lose their job and have to walk away from the deal."

Buyers making an all-cash offer in Boston can seamlessly close a transaction for sellers, and prospective homeowners can leverage that to whittle down a better sale price, which is especially true if the seller had a life event and is looking to offload their property.

Sellers can either immediately close on a deal with an all-cash buyer or risk playing a waiting game as other buyers go through lengthy mortgage approval processes.

The competition to own a home in the Boston real estate markets is fierce, as many first-time millennial homebuyers that rented for years are buying their first homes years after graduation. Many millennials and most other buyers require a bank-financed mortgage to purchase a home.

For those looking to sell a Boston house fast, the urgency and simplicity of selling quickly without the complications of traditional listings are crucial. All-cash home buyers have a leg up on the competition as they don’t have to go through the mortgage underwriting risk process. Not needing a mortgage commitment letter allows deals to close quickly, all depending on how long it takes your agent and lawyer to complete the paperwork.

When buying a home with a mortgage, there are additional closing costs related to the loan financing. Buyers using a mortgage pay origination fees, appraisal fees, bank attorney fees, and other miscellaneous costs.

Buying a Boston house without a mortgage saves you from having to pay those additional fees. Companies that buy houses for cash in Boston offer quick transactions, no need for repairs, and fair cash offers, making it a compelling choice for sellers. While it’s not a large sum of money, the closing cost savings can add up to thousands of dollars depending on your purchase price.

Buyers with the necessary funds to make an all-cash buy in Boston might be better suited to take out a mortgage, as interest rates are at historic lows right now. For homeowners burdened by extensive repairs, companies that buy houses as is offer a quick and cash-based solution, allowing them to sell without the need for costly renovations.

Utilizing a mortgage with a low-interest rate frees up funds for investing, where returns on investments could potentially outperform the cost of borrowing of the mortgage. Additionally, if the value of a property drops, a buyer using a mortgage can use the funds they saved to offset real estate losses via other investments.

Prospective buyers of a home or condo with cash in hand are seen as financially stable and can close a deal quicker. They often prefer to pay cash for homes, regardless of their condition, to sell a house quickly and easily, avoiding costly repairs and lengthy traditional sales processes. However, putting large sums of capital into a single real estate investment can be risky and expensive. The real estate markets are booming, and while an all-cash buy gives buyers an edge, prospective homeowners thinking of making an all-cash purchase need to weigh saving their money versus using a mortgage.

Buyers have to do a value assessment of their available funds and how badly they need to purchase a property. While an all-cash buy secures deals quickly and gives buyers a leg up in negotiations, buyers should always have cash saved up in case an adverse life event hits when it is least expected.

Buyers considering an all-cash purchase are putting down hard-earned money and need to ensure they’re working with expert buyer’s agents that offer modern technology and a financial benefit. A no obligation offer can make the selling process easier and more convenient, allowing homeowners to consider an all-cash offer without any commitments or pressure.

Prevu empowers buyers looking for Boston properties to earn up to 1% of their purchase price cash back via Prevu’s Smart Buyer Rebate. Essentially, all-cash buyers receive a portion of the commission that Prevu earns for representing them in the form of a commission rebate. As a result, you receive advice throughout the home buying process plus significant savings.

Interested in buying a home all-cash in Boston? Browse listings and see how much you can save with Prevu’s commission rebate.