Most land and farm transactions I work with are cash transactions. This is not to say that I work with only the independently wealthy. The majority of people that pay cash for a property have recently sold some other type of investment and are simply moving that investment into another investment that works better for them.
Many investors prefer the cash method as it is the most hassle-free and gives the buyer a negotiating advantage. The general thought is that a cash offer is stronger and that because the terms of the offer are stronger, the investor can offer a lower buying price. The seller perceives that they are dealing with a financially-able potential buyer and will usually give them more consideration. If the seller happens to be time-motivated in selling his property, cash makes an impression as well. Generally, a cash buyer can perform on a contract much quicker than one who needs to borrow money. Time is money, and it is never more true than in negotiating a real estate transaction. Of late, buyers that must borrow funds to close a transaction have taken anywhere from 15-45 days longer to close than transactions that were made with cash. A cash offer is a definitive statement from the buyer that says, “I want the property at this price and I can buy it.” Many times today, buyers want a property at a given price, but cannot close on it due to financial difficulties. Informed sellers are aware of this, so a cash offer gets their attention.
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