What does a "cash buyer" really mean?

[Chris Haas]

I want to understand what a "cash buyer" really is. I read lots of posts looking for cash buyers. So my questions.

Is a cash buyer really using cash, or is a hard money loan or even personal home equity line of credit being used most of the time?

What makes a cash buyer so much more attractive?

Is there a certain $$$ price limit that lends itself to cash buyers? Like distressed homes selling under $20K perhaps?

Lastly does a cash buyer often not need / want an inspection because they do it themselves? I assume even a cash buyer would want / need title insurance, perhaps they would skip an appraisal.

I tried to find some answers on these forums but it just seems like everyone assumes everyone else knows why cash buyers are nearly essential.

Thanks for your time
-Chris Haas

[Priscilla Z.]

Hey Chris,

There's no specific answer to your questions, except one of your questions "what makes a cash buyer so much more attractive?".....the answer to this question is that they can close FAST. From your questions I am assuming you are wholesaling, so there is a time frame your are working with and you won't have enough time for someone who is getting a mortgage (can take anywhere from 30-60 days) or dealing with inspections (a lot of wholesale deals are distressed and therefore will not pass inspections that lenders require).

Now, as far as your other questions....each CASH buyer is different. Sometimes they are looking for distressed properties, other times they are looking for properties that are ready to be rented. Sometimes they use their own money, other times they use hard money, it just depends on what makes sense to them.

As far as the price limit, each cash buyer will be different...it depends on how good the deal is. And again, each buyer is different, some will do inspections, others won't....

What I will tell you is this, if you are wholesaling, learn the formula that the cash buyers in your area are using and follow that formula. When you have a good wholesale, it will sell FAST...and they will bring the cash to the table.

Hope this helps.