Where is the "cash out" portion? Usually a house isn't deemed "cash out" by anyone other than the purchaser of the home. If this is the case, it is not good for the buyer because the seller has taken "cash out" of the home and will therefore not sell it any less than what the home is worth PLUS the cash they took out of the home.
For example, your sellers refinanced into a cash out mortgage. The home is worth $200,000. They bought it for $175000 and got cash out for the remaining worth of the home: $25,000. This works to a buyer's disadvantage because of course then the sellers will want all $200000 recouped and not just the $175000 that the bought the home for.
