Sometimes I live in the world of anecdotes.  My wife's a scientist, but I'm an anecdotalist.  And an inventor of words, apparently.  Nevermind.  I've seen this happen a couple times in the past months, and it's caught my attention:  Cash buyers who flake out at the last minute, and walk away from a deal.  The seller has the deposit, which is nice, but what they really wanted was to sell the house.

Why is this happening?  What does it mean for everyone else who's playing by the rules?  Well, partly some sellers accepted small deposits with the offers.  That makes it easy for a relatively deep-pocketed buyer to walk away.  But also, I think that some cash buyers get cold feet.  I mean, with a loan, a buyer doesn't see a hundred thousand dollar blip in their bank account.  With cash, that happens.

However...having said that...there are times when financing just ain't going to happen.  Burst pipes, mold, no central heat, etc.  In these cases, about the only way to put a deal together is to use cash or an existing line of credit.

Moral of the story:  Buyers:  If you've got the stomach for it, cash works.  But if you're going to pay $100,000 in cash for a house, the seller's going to figure you can put down a meaningful deposit.

Sellers:  Don't be misled by the allure of cash.  No one's showing up at close with a briefcase full of hundreds.  Nope, you're getting a check, and whether it's from the bank or the buyer, you've still got to cash it.