That is absolutely an incorrect statement, as anyone with experience in real estate closings will tell you.
From what I recall, Lending Tree is not a lender, but a company that provides a loan applicant the ability to get pre-approvals from different lenders and compare rates. More like a marketplace, though I also heard that lending tree had their own lender involved. I have seen loans close within 24 hrs. But that is an extremely unusual situation. Basically, a loan package with appraisal was released/assigned to a new lender - so most of the work was already done. Can a local bank close a loan in a short period of time? Sure. But that is the extreme minority of loans out there. The vast majority of loans are underwritten to FHA, FNMA, and FHLMC standards. Most lenders use appraisers that need at least 2 weeks to 30 days to do the job. And that doesn't include the time for an appraisal underwriter to review the file. Your posts above tell me that you really don't know the real estate lending market. You make bold general statements, and then qualify them with "oh you don't know banks that know their market." I have worked with major banks and have done loans thru-out the country - just about every state. That was a long time ago. But from people I know that still do it - not much has changed regarding the underwriting process for a purchase loan - in fact, it has gotten worse. And that includes people I know that work for local banks that "know their market."
I have done FHA in two weeks. But again, that is not the norm, and you don't know it's two weeks until the two weeks are up. Why is that? Because anything can happen in the interim. How do you know, when the app is done, that the house in question is in great shape? Ever see an FHA appraisal with 20 stipulations? Bottom line, and this will be my last post in this thread... On the whole, a cash buyer can close a lot faster than any lender. Sure some financed deals can be quick, but you don't know until they are done because anything can pop up. The time frame I am talking about is the time from the execution of a purchase agreement to settlement, when funds are exchanged for keys. The OP asked if he has any advantages to being a cash buyer. The clear answer, in my opinion, is a resounding hell yes, and now, a rational seller will not hike the price - especially in this market. Depending on their circumstances, the seller may even entertain a lower offer. Again, I am speaking of the majority of situations. Yes, there are situations where the borrowing buyer may be as good - but that is not as common as most think.
I was told by my banker that starting the first of this year their were no solid pre approvals given. I'm buying with a convential loan. He told me they give you a good faith letter about the loan. It's been a long time since I've been through a house purchase so I'll se how it goes.
Title of thread is "Why do home sellers prefer cash buyers?" 2 main reasons: 1. Quicker closings 2. Less likely for the deal to fall through
In most states, sellers like cash, because the mortgage process (and the associated waiting period for approval) can be bypassed. In NY, if you go into contract with a buyer who applies for a mortgage, your home effectively comes off of the "available" list for a period of time until the mortgage is approved or disapproved (typically 2-3 months). If the mortgage is not approved, the seller has to make the house available again, but the seller has now lost 2-3 month of marketability. With a cash transaction, the whole process can be closed in a much quicker fashion, and the seller is protected from this mortgage-approval time lag, not to mention the credibility of the buyer going through with the transaction. Cash is king. The house is worth what it is worth. The buyer will pay market value, and based on appraisal value, will pay the same as a mortgagee. In fact, I've seen cash buyers get better deals, since the risk is mitigated in the sellers eyes.
you guys who think pre-approval is as good as cash obviously are just bystanders still living in 2003. i know people who are actively house hunting and they have seen dozens of deals fall through because the buyer's financing did not go through despite being pre-approved for $xxx. those people i know also were rejected because the seller received a cash offer, sometimes for less. cash is king. sellers will always take the cash offer if the offer is otherwise the same. cash deals are also much faster (you can close in 1-2 weeks). if the seller is in a hurry, this may be important to them.