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4 Tips to Help You Determine if a Cash Offer Is Too Good to Be True

It can be daunting to sell homes to interested home buyers in a crazy market like we’re dealing with right now. Home shopping fatigue is real, and it’s even more exhausting for you and your clients when dozens of offers have been submitted and rejected, over and over again. And it can be even more frustrating when home buyers who need financing are being trumped by home buyers with cash offers. Does cash really mean cash, and how do you and your clients who need financing even compete? Here’s 4 tips that can help you determine if cash is king when working as a buying or listing agent.

Tip 1: Cash Offers Can Still Fall Through the Cracks

Today’s market is fast paced so we’re seeing more cash offers than ever to look like the strongest and best offer in the bunch. But cash doesn’t always mean cash when it comes to buying a home. We’re seeing some home buyers desperate to have their offer stand out so much so that they’re getting clever on how to make a cash offer happen (without actual cold, hard cash).

You may be asking: “How can a home buyer can do this?” One example is: some home buyers are using new programs offered by local real estate firms or iBuyer options that are loaning extra money to enable qualified home buyers to make cash offers on a home. It’s not the best way for home buyers to set themselves up for financial success and everything comes at a price.

Bottom line:

  • For listing agents- Make sure the cash is verified with a proof of funds letter from their bank showing the buyers have the entire amount available before heading to closing. This will save some heartache for both you and your client.
  • For buying agents- Verify with your clients that they have a true cash-offer and ask them to provide proof of funds from their bank. It’s always good to know what situation you’re working with when it comes to ramping up a bidding war.

Tip 2: Cash Buyers Can Still Have Contingencies

Typically, the less contingencies involved in an offer, the better when it comes to making a strong offer on a home. It’s assumed that a cash offer means no issues because there’s no financing contingency, but that’s simply not the case.

Here are some common contingencies that can be found in offers (including all-cash offers):

  • Home sale contingency
  • Inspection contingency
  • Appraisal contingency
  • Title contingency

Even if contingencies are waived, clients can still move forward with an appraisal and home inspection. If this happens, just make it clear to not expect the seller to fix any problems with the home or be to be flexible if the appraisal comes in low.


If your client needs financing to buy a home, try and eliminate as many contingencies as possible to help the offer stand out over these all-cash offers. It may come down to the number of contingencies instead of financing vs. all-cash when negotiating.

Tip 3: Not Every Seller Is Interested in a Cash Offer

We may get some push back on this one. Why would a seller not be interested in a cash offer? Sometimes cash offers are from investors or house flippers. Many people want to sell their beloved home to someone who will build a life there and create memories just as they have—not have renters come and go, or quickly flip the home after improvements are made. This is why it’s important to ask the seller what is important to them during the home selling process.

Tip 4: Make Sure Your Clients Are Certified

A loan officer can say “yes” all day long to your clients, but ultimately, it’s up to the lender’s underwriter to give the final approval to proceed with closing on a property. The best way to ensure you and your client gets to the closing table without surprises is to have your client become a Churchill Certified Home Buyer. This means your client’s loan is pre-underwritten before a property is even found. All the paperwork is done upfront and there’s less stress when it’s time to make an offer on a house. Once you and your client find the property they’d like to make an offer on, we just need to make sure the home meets the guidelines of your loan.

This also helps when you’re in a bidding war, which is becoming the new normal in today’s real estate market. Once your client is certified, a Churchill Home Loan Specialist can give you and your client a Certified Home Buyer letter to help you stand out from other home buyers. This letter is better than a pre-qualification letter and a pre-approval letter combined! And funding for the loan happens at a much quicker pace since all the legwork has already been done at the beginning of the mortgage process.

Contact your Strategic Loan Partner today to learn more about programs that compete with cash offers.

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