Why does it matter? Cash, Hard Money or Commercial Loan?

Question

I am wholesaling a property, currently. I have it posted that my property is for a cash offer. Someone told me that they are coming with a commercial loan. Upon researching, it appears that coming to closing with a commercial loan, cash or hard money are somehow different things or processes at closing. Why does it matter? Doesn't it all translate to cash to the seller?

I don't understand.

Andrew Beauchemin · Answer

@Daniel Rogers "Cash offer" doesn't necessarily mean they are paying in actual cash.  All this means is that the buyer is waiving their financing contingency.  From a seller's perspective, the benefit to a cash offer is the assurance that the deal will close without the risk of financing falling through.

Daniel Rogers · Answer

Thanks for your reply. I understand that banks won't touch anything that needs renovations with a ten foot pole. I'm simple talking about the closing process while wholesaling. If someone comes with cash vs if someone comes with a loan or private financing, how does that effect me at the closing table as the seller? It's happened twice that I say "This is being sold for cash" and I get a response that says "I'm not paying in cash, I'm paying with a commercial loan" or "a private lender". At the closing table doesn't it all translate to cash? Why does the method of financing on the buyer's end really matter? There are even fees at title companies associated with not using cash, but using financing.

Christopher Phillips · Answer

@Daniel Rogers

Depends on the condition of the property and how the seller has to get their property sold.

If the property is in bad shape, it will be difficult to get traditional financing. If they are getting a rehab loan then it will be less of an issue, but that depends on how long it will take them to get through underwriting and how much time your seller has.