"All Cash Only" in listings

[Evan Parker]

This may be a very quick and obvious answer, but it's something I've questioned for quite a while in my journey, maybe one of you can shed light on it.

Why do RE agent or even FSBO listings sometimes have "All Cash Only" rules in their listing?

From a seller's perspective why would they care where their money comes from, so long as it comes? I understand the cases where a property is in such bad condition that a bank wouldn't likely lend on it, but why set that qualifier straight out of the gate? You don't know what kind of connection I may or may not have with a lending source.

[Mitch Messer]

Hey @Evan Parker! This is a great question: Thanks for asking it!

It's really just a matter of risk management for the seller. Dealing with a buyer with all the cash necessary to purchase means they won't be calling you two days before the closing to say their financing fell through and they can no longer buy.

Just in the last 30 days, I've spoken with three different investors who were informed within days of closing that their lender was either withdrawing their financing commitment or radically worsening the terms (unless a sizable fee was paid to them).

Not the buyers fault, perhaps, but that fact doesn't help our seller, who still doesn't get their sale. And getting to keep the buyer's earnest money is cold comfort.

And, this doesn't even take into consideration all the many other legitimate reasons a lender might not fund a deal: appraisal comes in too low, borrower loses their job, change in credit status, etc.

Some sellers just want certainty: When it absolutely, positively has to close, sellers want a buyer with "All Cash!"