Cash Offer or Higher Financed Offer? How Salt Lake County Sellers Compare Them

Not automatically, and not automatically the other way. The better offer is the one that puts the most money in your hands, on a timeline you can live with, with the lowest chance of falling apart. A cash offer can be stronger because it removes loan and appraisal risk. A higher financed offer can be stronger because the price gap more than covers that risk. You decide by comparing the whole offer, not the top line.

Charisse Walker is a real estate agent with Chalker Properties Group in Salt Lake and Davis County, Utah, and a licensed mortgage lender. She walks every seller through the same question first: what will you net, and how sure are we of it?

This is general information, not legal or tax advice. Every offer is different, and nothing here predicts how any one deal will go.

A cash buyer is not using a mortgage. That removes three things that can derail a financed deal.

• Loan approval risk. There is no underwriting that can fall through late in the process.
• Appraisal risk. A lender-ordered appraisal that comes in low is not a factor.
• Speed. With fewer steps, the closing can sometimes happen faster, if the buyer and the title company are ready.

It does not change the need to verify. Proof of funds is the starting point. Ask for a statement or letter from the buyer's bank showing the money is available, and have your agent and title company confirm it.

More money on paper, and often more steps. A buyer with a loan needs underwriting, an appraisal and a lender who closes on time.

That does not make financed buyers weak. Most home sales in Utah involve a loan, and a well-prepared buyer with a strong pre-approval is a very solid offer. The question is how much additional risk the extra price is carrying, and whether the gap in price covers it.

A verified pre-approval letter from a real lender, a reasonable down payment and clean terms all improve the odds. A thin pre-approval and a long list of contingencies do not.

Put them side by side on one sheet and fill in the same lines for each.

• Price. The contract price.
• Concessions. Any request for the seller to pay closing costs or credits.
• Contingencies. Financing, appraisal, inspection and sale of the buyer's home.
• Deposit. The amount of earnest money and when it is due.
• Timeline. Closing date, possession date and any rent-back request.
• Repairs. What the buyer is likely to ask for after an inspection.
• Proof. Proof of funds or a lender's pre-approval, verified.

Then estimate your net from each. Our guide to the Utah seller net sheet explains how, and what it costs to sell in Utah covers the other costs to subtract. A higher price with large concessions can net less than a lower price with none.

• The financed offer relies on the appraisal coming in at price, and comparable sales are thin.
• You have a firm date to meet, such as a relocation or a purchase of your own.
• The buyer is also waiving the inspection or has a short inspection window, and the price gap is small.
• You have already had a financed deal fall apart once, and the home is back on the market.
• The house needs work, and a cash buyer is comfortable with its condition as it stands.

In these cases certainty can be worth a modest drop in price. How modest depends on your numbers, and I would rather show you the math than give you a rule.

• The price difference is large enough to cover a failed deal and a delay, even after concessions.
• The buyer has a strong, verified pre-approval and a sizable down payment.
• The comparable sales strongly support the contract price, so a low appraisal is unlikely.
• You are not in a hurry, and a normal closing timeline works for you.
• The cash offer asks for heavy concessions or a long inspection period that erodes its edge.

A higher offer that is well supported is still a strong offer. Do not dismiss it because the word cash sounds safer.

Picture a seller in a Salt Lake County neighborhood with two offers. One is cash at a lower price with a short closing. The other is financed at a higher price with an appraisal contingency and a request for closing cost help. This is an example, not a client story.

The seller and I list every term for both, estimate the net from each, and check the strength of each buyer's proof. Then we ask one more question: what happens if the financed deal falls apart in week four? If that puts the seller in a bind, because of a purchase deadline or a move, the lower cash price may be worth it. If the seller has time, the higher price may win.

A counteroffer is also possible. You can respond to one or both buyers and ask for improvements, such as a shorter contingency period or a higher deposit. See how to respond to offers in our guide to handling a low appraisal, which also applies to the financed side.

• Choosing on price alone. The number that reaches your account is the one that counts.
• Skipping proof of funds. Ask for it and verify it. Unverified cash is only a promise.
• Ignoring the closing date. A fast close that does not fit your move is not a benefit.
• Assuming cash never fails. A cash deal can still fall through if the buyer backs out or the home inspection raises issues.
• Forgetting back-up offers. If you accept one, ask your agent whether a back-up offer makes sense.

Is a cash offer always lower? No. Some cash buyers pay full price or more. Compare each one on its terms.

Can I ask both buyers to improve their offer? Yes. Your agent can counter, or request best and final offers from both, depending on the situation.

Do cash buyers skip the inspection? Some do, some do not. It is a term in the offer, not an automatic feature.

Does cash change my closing costs? Some lender-related costs fall away, but title, escrow and your own selling costs still apply. Your net sheet will show the rest.

How do I verify funds? Ask for a bank statement or a letter from the bank, and have your agent and title company review it.

Here are the next steps, simplified: gather every offer, build the side-by-side sheet, estimate your net from each, verify the buyer's proof, and decide whether to counter. You can see how we plan a sale on the selling your home page. If you have offers in front of you or expect them soon, talk with Charisse here. We compare them on your net, not on the headline number.