The process of selling a home is changing—and many people like it that way. An increasing number of homeowners are opting to sell their house for cash. This often appeals to those with urgent financial needs or people who need to pack up and move ASAP. Selling a home for cash simplifies things quite a bit. Homeowners can sell their properties faster because you completely bypass the waiting (often seen as a waiting game) for the buyer to get financing. Sometimes this process takes longer—sometimes shorter—but with cash, you can usually expect to sell your house within 7 days. These types of sales sometimes (but not always) favor home sellers in NASDAQ because there aren’t as many opportunities for repair-related negotiations, etc. If you decide to go with a “sell my house fast”-type NASDAQ company, you should look out for scammers. Unfortunately, all-cash home sales attract a lot of pessimistic home-buying companies. Most of these companies are good (think weed out the bad); “most,” not “all.”
The Advantages of Selling a House for Cash
Being able to sell a house for cash has so many advantages that can benefit you, the seller! Speed of the sale. Because there is no lender involved, and thus a closing process to go through, you can typically sell your home a lot faster than a financed sale. It’s been done in as short as 5 days versus weeks to months! This can help if you need to move in a hurry or are running into financial problems. Selling the home as-is. You don’t need to worry about making any repairs or doing anything fancy to get the home sold. You are able to sell your home as-is. This saves you time and possibly some income not having to put into the house to get it sold. It also doesn’t put a sign on the house saying it’s not move-in ready and might not be in as great condition as others on the market.
The Drawbacks of Selling a House for Cash
Selling a house for cash may sound glamorous because it’s simple and due to the speed of closing, but the main problem with it is: Cash offers often aren’t market value for the home Much like selling a car, cash buyers — especially investors — are in this game to make money. They need to be able to turn a profit. And, to do that, they often are not going to give you what your car is actually worth. In fact, most of the time they are going to severely lowball you to ensure that they make as much money off of the deal as possible. This is especially frustrating if you’ve put time and money into the home. Negotiating with Cash Home Buyers Speaking of lowballing, it can be very rough negotiating with these buyers. They are expecting a decent-sized discount because they are paying cash. But, truth of the matter, is most people aren’t really set up to be able to wheel and deal like a car salesman. It can sometimes become very high-pressure as well. The person may keep trying to pressure you into settling for less and less and less, even when the amount is way less than what your actual expectations are. You might hear things like, “Well, you aren’t considering agent fees. We completely bypass the agent, so what I’m offering you should actually be more than enough.” You could replace cars with anything, and the statement would still apply. People are naturally attached to their stuff, making it difficult to separate the emotional aspect from the more business decision-making side. Risks of Fraud with Cash Home Buyers Now, I’m not trying to dissuade you. Heck, I work with people looking to sell their cars for cash all the time. I’m just analytical, so I like to consider all the potential risks associated with any decision I make. And, in the same light, I want to share those potential risks with you. Unfortunately, there’s a potential for a higher risk of scam when it comes to these types of sales. You have to be extremely careful when working with someone. And, if you’re working with someone online, remember the rule, “Buyer beware.” It’s extremely important that you do your due diligence. Never hand over your title without getting the money first. Always make sure that the cash is actually in your hand as well. The last thing you want to do is send your title to an agent claiming to be one thing when, in actuality, they are actually a fraud… and there’s no cash!
Making the Decision to Sell for Cash
You need to evaluate your financial situation before you decide to sell your house for cash. Cash offers on a house provide you with the immediate liquidity you may need to move to a new location or pay off lingering debt. But you have to be certain that accepting a cash offer will be to your new long-term goal’s advantage. You have to determine if the price is right and it will allow you to invest in the new things that you want later. How you evaluate a cash offer on a house will also have to do with your home’s condition. If your home is beaten up and needs some major repairs, then your home may only attract a certain kind of buyer (typically cash buyers that plan to renovate or build something new in the home). Understanding what other homes in your area are currently selling for under similar conditions can help you weigh whether or not the cash offer is a good or bad one. One of the keys to getting a cash buyer to pay more for your home comes with strong negotiations. Depending on the buyer, you need to offer exactly what they want. Some buyers are looking for a discount. That means that if you want more money, then you may scare those buyers off. But you need to be able to justify why you are worth more. You can tell the buyer to compare your home to other homes in the area. If your home doesn’t need any repairs and has been recently upgraded, then homes built in the same year aren’t considered equal to your home.
What is a Cash Home Sale?
A cash home sale transpires when a buyer has no need for a mortgage or any financing options; instead, he or she merely buys the property outright with cash. For sellers, this appeals to them because—in theory—it should be a quick process. Cash buyers have the ability to bypass all of those super timely processes needed to obtain a mortgage loan. This is much more efficient and results in fewer complications (e.g., delays). On the other hand, “traditional buyers” usually have to go through a process to get a loan (unless they’re extremely wealthy, have been saving for years, or have received a large inheritance), and this usually means filling out an application to a mortgage lender. Now, for these types of buyers, they need to have certain types of inspections and/or appraisals usually done before they can get the loan in the first place (and even ultimately close on the house in general), as well as in order to even qualify for the loan they’re applying for in the first place. This sparks the idea of presenting “no contingencies” on the buyer’s side of the agreement for the sale of the home. So, for cash buyers, they usually present sellers with “no-contingency” offers, connoting to the sellers that, due to the fact they’re agreeing to buy the house “as is,” there’s no reason for the sale of the house to fall through whatsoever. For cash buyers who are trying to negotiate a deal on the current asking price of the property, this might raise the chances that the buyer can purchase the house for a lot less. This forces the seller to compromise just a bit, but usually, in the end, “winning the belt” (i.e., property) is what gives buyers an excellent piece of leverage.
There are many reasons that both sellers and buyers appreciate the relative simplicity of cash sales. The pleasures of this alternative are largely self-evident; no bank can be so sure as cash in their ability to fund a purchase without delay, and most sales will come to pass without any of the downtime buyers need for other (longer) deal contingencies, such as getting the approval on a mortgage note or waiting to bring in a inspection team to work at the property. In the most straightforward of cash deals, sellers will have their money deposited in the bank within days. Moving home fast, for example, while removing a lot of legwork, reduces the number of moving parts over any length of time. A sale could, potentially, turn out to be less anxious. It matters not, for instance, the potential volatility in the national or global economy, the relevant attrition rates of home sales that customers are looking at with those hotting up in other nearby regions; it matters not one iota what rate the borrower is loaning at: all those things are done because the loan has been paid upfront and taken out entirely.
Related posts:
- Guide to Selling your House for Cash
- How All Cash Process Works
- Benefits of a Cash Offer
- How to Choose Reputable Cash Offer