If you’re looking to sell your home quickly, one of the questions you may be asking yourself is: “Should I sell my home for cash?” Here are the most important pros and cons to help you make your decision.
Selling a home isn’t always a simple process. Some people find it difficult to move for sentimental reasons.
Others don’t want to spend time and money fixing up the place in the hopes that a buyer might be more interested. And there’s no guarantee you can sell your home in a timely manner.
But there is another option. Google the words, “sell my home for cash” and you’ll find out the myriad benefits of selling a house for cash. While there are definite advantages, there are a few downsides, too.
To help you determine the best way to sell your home, here are the pros and cons of selling houses for cash.
Reasons to Sell My Home for Cash
There are many reasons why selling your home for cash makes sense. You can avoid doing any repairs because the buyer is okay with purchasing the house ‘as is”.
You can also avoid dealing with code violations and any permit issues you have.
You can usually sell your home more quickly which will help you to avoid the bank repossessing or foreclosing on your property. Instead, you’ll receive a fast home offer which you can either agree to or decide to pass on.
You’ll also get your money more quickly which can help you pay down any debts you have.
Cash sales are great for people divorcing, moving or who just inherited property and don’t have the money to pay for an extra home.
It’s also a great way to get rid of bad tenants if you’re a landlord.
Advantages of a Cash Sale Real Estate Closing
There are few things more stressful than thinking you’ve finally sold your home only to find out at the last minute that it fell through because the buyers couldn’t get a loan.
When that happens, it means the process of finding a new potential buyer and then having them fill out the paperwork and apply for a mortgage happens again. And with no guarantee that this time things will go smoothly.
One of the benefits of selling a house for cash is that there are no loans or mortgages involved. It’s just cash and either the buyer has the cash or they don’t.
Even better, once that cash has been passed along, the buyer can’t back out.
Selling Houses for Cash Means Saving Time
And sales involving cash typically close in one to three weeks whereas sales involving a mortgage typically take between four to seven weeks to close.
If you’re in a rush to move due to a new job or a divorce, time is of the essence. Waiting for what could turn out to be six or seven extra weeks without the guarantee that it’s a done deal is nerve-wracking.
It’s also an unnecessary waste of your time. And don’t forget about the time it will take for you to locate and hire an appraiser so the bank can ensure your home is worth lending money to the buyer.
When you sell your home for cash, there is no waiting. There’s just an offer you can agree to or refuse. If you agree, the money is usually in your hands by the end of the week.
Purchases the House “As Is”
In a cash sale, you’ll also save money by not having to deal with any repairs. The buyer already knows what needs to be fixed. However, you should at least do a bit of home staging to make it more appealing.
They’re saving a bit of money by paying with cash. You’re also saving money by not investing time and money by doing costly renovations that you hope a buyer will like.
You’re also saving money by not having to hire an appraiser to assess the house in order for the bank to put up a loan. When a buyer is paying cash, it’s the buyer who does the home assessment.
It’s then the buyer’s responsibility to make a cash offer on what he or she thinks it’s worth to them.
The Downsides to a Fast Home Offer
As with everything in life, there are a few downsides to agreeing to a cash sale real estate closing. Let’s go over them now.
First, you will not get full market value for your property when a buyer is making a quick cash offer. Most likely you’ll receive about anywhere between 65% and 80% of the value of your home.
Their goal is to give you the least amount of cash possible. And your equity position may fall as low as 50%.
While the buyer will take the title and your mortgage payments, it doesn’t mean that you’re off the hook. You are still responsible for that loan until it’s paid in full. If it’s a “subject to” title then back out as it’s against the law.
Watch Out for Dishonest People
Secondly, not everyone in this business is honest. However, that’s true of literally every industry out there.
Before you work with someone, do your own due diligence. Make sure to do your homework on anyone you do business with first.
And if you get the sense that they’re shady, don’t work with them. Wait until you can work with someone you trust who isn’t pressuring you to make a quick decision you aren’t ready to make.
How to Sell a House for Cash
It’s usually best to do your homework before you sell so you don’t end up getting taken advantage of. There are real estate agents who can help you through the process so you end up with the most amount of money possible.
This useful article can help you get started.
Before you accept a fast home offer, get proof of funds from the other party. And watch out for cash-paying buyers who try to get you to add contingencies for appraisals and inspections.
The whole point is to avoid this process and therefore, these added demands don’t really warrant giving that type of a buyer a discount.
Lastly, many cash buyers are looking for homes they can repair and resell. As such, you may be able to cut a short-term lease-back deal if you’re looking to remain in your home.
This way, the new owner gets a new income stream while he or she does the repairs. It’s a win/win situation.
The more you learn about real estate, the easier it is to learn how to sell my home for cash without being ripped off.
We can help. Our blog articles can help you learn the best and quickest ways to sell your home for the most amount of money. Click here to start your real estate education.