Pros and Cons of a Lower Cash Price vs a Higher Bond Offer

South African home sellers may face a conundrum when comparing a lower cash price or a higher bond offer. While the property market stabilises, sellers and buyers are still under financial pressure. 

Ultimately, the choice is dependent on individual circumstances. Here are a few noteworthy insights to consider before accepting the final offer. 

Advantages of a lower cash offer

Sellers can enjoy better financial security because there is less risk of the sale falling through due to unforeseen financing issues. 

Cash offers can often streamline the buying process as they’re faster and less complicated than bond offers. Fast-tracking the sale may be essential if you’re relocating, settling an estate, or simply needing money from the sale. 

Drawbacks

Buyers know they have negotiating power when offering cash deals, which means the offer may be lower than the asking price. Because of this, you may not receive the full value of your property. 

Accepting a cash offer at a lower price may be the best move for those who need a shorter timeline and convenience and can afford to accept a lower price. 

Advantages of a high bond offer

While the property market is improving, many buyers still rely on bank financing. The bank financing route often brings more money to the table than cash offers. 

Pre-approval letters may offer better assurances than just word-of-mouth. Although the final approval still depends on the bank.  

Drawbacks

The entire sale hinges on the buyer waiting for full bond approval. The approval may be affected by various factors and can cause delays and, in the worst case, failure to secure funding. 

All things considered, this may be the best option for sellers who want to prioritise receiving the maximum sale price. It would be ideal if you’re not in a rush to sell and can afford to wait. 

The correct decision depends on your priorities. If time is more valuable than money, accepting the cash offer may be your best bet. Alternatively, if time is not an issue and you want to maximise your return, a bond offer may suit you. 

Partnering with an expert Property Practitioner will ensure you make the right choice. They’ll be able to help you navigate the current market conditions, review the buyer’s position and negotiate terms in your best interest.