I mentioned this elsewhere, but 'closing certainty' is a real concern in the real estate market, to the point where many sellers will take a lower offer price in favor of a cash buyer.
I never understood why though, in the worst case doesn’t their house just take a bit longer to sell if a deal falls through? Aren’t there backup offers in play? Is taking a lower offer really better than just waiting a bit more for the higher offer?
As an example (real-world) a seller turned down a few early under-list-price cash offers, and eventually got an at-list offer from a mortgage buyer. But the buyer ended up having trouble finalizing the loan and as a result it took almost two months to close. The home had already been sitting on the market for over a month, so had the deal fallen through, the seller may have had to put it back on the market, which could have added a few more weeks at best, and a few more months at worst to the process. So had they gone with the cash buyer right away, they would have sold the home in a few weeks after listing it. But instead it took a few months, and there was a non-insignificant chance that it would have taken a few more. And during this time, the seller was not living in the home, so presumably they were paying rent/mortgage on two homes. For some people that could be tough to swing, and not worth an extra 5-10% on sales price.
A few other things to consider. 1: The above example was in a relatively hot market. But in a more 'normal' market, homes can sit on the market for months at a time before attracting a good offer. So in a lot of markets, waiting for the next offer could mean months at a time. 2: There is a bit of a 'stigmatization' around properties that fall out of contract, because a common contingency is an inspection contingency, so the theory is that buyers start to shy away if a home falls out of contract because they are worried it is a lemon. I have personally seen a few listings where the realtor will explain the contract failure in the top of the post (i.e. buyer couldn't get a loan or something like that) as a clear attempt to ward off the 'lemon' concerns. And because mortgage buyers usually require a long list of contingencies, the risk of a failed contract is a lot higher than cash buyers. So cash buyers are 'safer' in that sense. 3: Sellers are often rolling over the proceeds of a sale into their next house, so any extra money on their home sale will most likely show up as a slightly lower monthly payment on the next house. So for every extra $10k you will only see about $50 lower on your next monthly mortgage payment (assuming 30 year).
Here’s an example reason why someone might take an earlier offer: A new job starts July Nth. It’s now mid-April. The family needs to be moved before July. They don’t have a lot of months left to close a deal.