Are you planning to buy a house? How are you planning to make the payment? There are primarily two options for you. You can either take the loan from the bank, pay the mortgage for many years or you can buy the house in cash.
You will be surprised to know that there are a lot of landowners who prefer cash over any other mode of payment. Not to mention, you sell your house faster for cash. But not a lot of people are able to pay in cash. Mortgage loans are so popular for a simple reason, people do not have cash to pay. But if you have cash, things become convenient for sellers. This is why they prefer it. Here is how.
Transaction is faster
No one can deny that fact that if the buyer is paying for the house in cash, transaction will be faster. When the buyer applies for mortgage, it takes time to get processed. Sometimes it takes longer than expected to process. This is because there is lots of paperwork involved.
The banks and financial institutions have several requirements buyers need to meet. From the day of the application of the loan to the day of processing there could be many complications. Almost every seller wants to get over with the transaction quickly.
Most of them have already planned future investments from the money they will get from the sale. This is why it makes a lot of sense for the sellers to be paid in cash.
There are higher chances of transaction going through
The likelihood of the transaction getting completed is much higher when the buyer is paying in cash. Many times it happens that the mortgage is denied to the buyer in the end. As already mentioned, loan process has to go through many steps and there could be complications.
They buyer has to get the approval from the bank. Buyer’s current income, existing loans, previous credit record, and a lot of things are factored. If the seller is getting the cash, they will know that the transaction will go through as there is no third party involved.
It is more convenient to the seller
Given the above two factors of speedy and guaranteed transaction, things become more convenient for the seller. If the seller has any future investment plans, they can get onto it quickly. There are many sellers who have eyed another property. The cash transaction will mean they will have the money in hand quickly. This further means that they will be able to buy another property before anyone else does.
Due to the reasons mentioned above, the sellers prefer cash over the mortgage. But it does not mean that sellers will refuse the mortgage payment.