Several reasons may occasion the need to sell your house or property. You could be selling to relocate due to job transfer, upsize or downsize, tap into your home equity, or simply move to your dream home. Regardless of the reason for selling, you can either sell your home with a realtor or cash buyers.
Selling your property for cash is increasingly becoming popular for many reasons. However, some homeowners choose to maintain the traditional sales process of selling through real estate agents for various reasons. This article highlights a few reasons why you should and shouldn’t consider cash buyers.
What Is a Cash Offer?
As the name suggests, cash offers are buyer bids in cash. This means that potential homebuyers don’t rely on mortgages or other forms of financing to purchase the house. Cash offers are very appealing to sellers who are desperate to dispose of their houses due to several flaws or are in a hurry to close the sale. Most sellers also prefer this option because there is no risk of the buyer’s mortgage falling through.
Cash offers tend to have a quick closing period as sellers don’t have to wait for the buyers’ mortgage underwriting process to be completed. Generally, cash offers for the house depend on the prevailing real estate market, the condition of the house, and individual marketing.
Who Buys Houses for Cash?
Several buyers can purchase your house for cash, including:
1. Investors
Real estate investors purchase properties for cash. Investors primarily target burdensome properties or sellers who want to close the sale quickly.
2. Homebuyers Who Want to Stand Out
Potential buyers can use their inheritance or investment returns to purchase properties for cash. This is always common in the seller’s market, where the demand for homes is more than the available homes resulting in bidding wars.
3. iBuyer
Also known as instant buyers, it is a real estate development company that buys properties directly for cash. Before selling to iBuyer, ensure that you request the company’s offer. The sale will typically close between 10 and 90 days if you accept the offer. However, iBuyer uses a home valuation tool to determine the value of your house.
The tool estimates the value of your house strictly based on the details you provide in comparison with properties that were recently sold in your neighborhood. iBuyer also charges a convenience fee, which can lessen your final payout.
4. House Flippers
If your property requires extensive renovation, you can sell it for cash to house flippers. These cash buyers purchase your house as-is, renovate and resell it for some profit. House flippers offer less than the approximated value of the property. Most of them adhere to the 70% rule, which means they can’t pay over 70% of the property’s value after repair.
Benefits of Selling Your House for Cash
You should consider selling your house for cash for the following benefits:
- No preparations are required – Selling your house for cash eliminates the home staging procedures required to increase property value. You don’t have to worry about decluttering, deep cleaning, and presenting the house to potential buyers. Cash buyers don’t look at how messy or clean your property is.
- Fast sales closing – Selling your property through realtors can take months. Since cash offers don’t rely on mortgage lenders, you can close the sales process within two weeks.
- Odd layouts are welcome – The volatile nature of the real estate market can make it difficult to sell some properties. This could be due to strange color choices, shag carpeting, odd additions, and other features that turn off the average buyer. Cash buyers don’t care about oddities.
- No visits from strangers – Selling your house through real estate agents requires that you prepare for an open house for potential buyers to view the property. This often feels like an invasion of privacy. You can avoid the hassle of letting strangers in your house by taking a cash offer.
There are also fewer contingencies and no appraisals required for cash offers.
When to Sell Your House for Cash?
The need to list your property for sale could arise due to many reasons. Regardless of the reason, choosing the right selling option is crucial to having the easiest selling process. Below are a few reasons that selling for cash makes sense:
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- If it is the best offer – Be it because of quick closing, the best price on the market or some contingencies have been waived, cash offers are sometimes the best option.
- If you have a rental or investment property – A cash offer is the best option if you can’t find tenants to occupy your rental property.
- If you inherited the property – You can sell your recently inherited house or rental unit for cash if you don’t want to maintain it.
- If you want to access your home equity – Depending on several circumstances, you may want to access your property’s equity immediately.
- If you are relocating and need money for a down payment – Cash offers are a good option if you want to relocate quickly and need to make a down payment. Having cash makes it easier to purchase your next house without applying for a second mortgage or bridge loan.
- If your house has difficult circumstances – Properties with title flaws, requiring major renovations, accumulating fees and taxes, code violations, or is storm-damaged can be sold for cash.
Why Shouldn’t You Sell Your House for Cash?
Some of the pitfalls of selling your house for cash include:
- Low offers – Most cash buyers purchase properties for profit. The more they pay for the house, the less the profit.
Sale is not guaranteed – Even though cash offers promise quick closing and all-cash transactions, you can’t be guaranteed that the sale won’t fall through. The only surety is when you have signed the contract and money has been deposited in your bank. - Repairs and improvements are deducted from the price – While cash sellers aren’t required to repair or renovate their properties, cash buyers reduce the purchase price to cover these costs.
Endnote
The decision to sell your house for cash comes down to the property owner. If you are facing a desperate situation, have a lot of equity, or own the entire property equity and need to close the sale within a few weeks, selling for cash is a good option. However, you should be willing to accept the price. You also save thousands on real estate commission and avoid the lengthy sales process.
