Cash offers are always tempting, especially when you’ve been trying to sell your home for a long time or need to move quickly. During periods of inflation and tightening purse strings, selling a home for cash may bring a sigh of relief. However, is it the best approach? At certain times, depending on the deal, you could be leaving money on the table. Oftentimes, listing a home yields a higher return vs working with a cash buyer. On the flip side, selling your house directly to a ‘we buy houses’ company is helpful when dealing with properties in very rough shape. They are the only buyers who show interest during times like that. Either way, there are countless factors to consider when preparing to sell your house.
Here’s everything that homeowners should think about before selling a property to a cash buyer.
How a Cash Offer Works
Selling a home is just the beginning of the home-buying process. What follows can be complex and slow-moving. There are lenders and agents to consider, and escrow and title companies become part of the mix. There are fewer individual parties tied to a cash offer and the completion of the sale may move faster, in as little as a few weeks, while financed purchases usually take at least a month. This source outlines how we buy houses companies operate using cash. Cash offers, being completely liquid, are the key to a speedy real estate transaction.
Accepting an all-cash offer means that someone is agreeing to purchase your home but without financing. Usually, the offer is paid through a cashier’s check or with funds transferred electronically. Sometimes, homeowners will work directly with an individual buyer or a company that buys houses for cash, especially if they want to sell their house fast. There are still home inspections to pass and closing documents to sign, even with cash offers.
Benefits of Going with a Cash Buyer
Cash buyers were involved with 23% of all home sales in 2021, a 7% increase from the previous year. Cash buyers are more prevalent in certain markets, especially within larger cities and metro areas.
In addition to shorter closing times, selling to a cash buyer is appealing for a variety of reasons, including:
Fewer Associated Fees
Selling a home comes with a litany of fees — expected and not. Going with cash buyers can mean taking out fees related to mortgages and lenders. Sellers who want all-cash offers typically do not work with a real estate agent, so agent-related fees also may be avoided.
Less Time Needed to Make Improvements
During traditional sales, many buyers ask for improvements to be made to the home before a sale is completed. Sometimes this is a result of an inspection or used as a bargaining tool in tandem with an offer above the asking price. Often, cash buyers don’t make improvement requests. In fact, some buyers will purchase properties with multiple code violations tied to the property regardless of the condition. This code violation guide outlines how homeowners can sell a house that suffers from severe damage. The key to selling a property that needs improvements and has code violations tied to it is working with a cash buyer.
Requires Less Time From the Seller
Open houses, advertising, marketing, and meeting agents — selling a home can be a huge time suck. If a seller prefers an all-cash offer, repeated showings or open houses aren’t usually required. Sellers often find cash buyers themselves, so the need for marketing also goes out the window.
Offers Piece of Mind
Selling a home can be a wild ride. When a sale seems like a sure thing, a last-minute financial or lending issue or just a change of mind can cause a deal to fall through. An all-cash offer significantly decreases the chance of a surprise.
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