Considering an All-cash Offer on Your Home? 8 Things You Should Know
Selling your home is never an easy process. This moment is when the emotional memories and happy times spent in your house come knocking. Once you get over the emotional aspect, the business one immediately storms in. The never-ending thought on the best price for your home will spin through your mind. Questions on who to sell to, and where to find market might keep you up at night. Before gearing up to sell your home for an all-cash payment, below are eight things you ought to know.
Cash House Sales are Quick and Frictionless
Unlike selling through a mortgage, the only parties interested in the house sale are you and the buyer. Selling your home through a mortgage might delay your deal for a month or more, as you wait for approval on the house’s appraisal and buyer’s credit score. It might worsen if the bank rejects the buyer’s request for a loan. By selling your home for cash, your sale transaction is not at the mercy of banks and other mortgage lenders. You can close the sale within a week, so long as you and the buyer are content.
Not All Buyers Want Your Home in its Current Condition
While there are buyers who have no issue buying the house in its current condition, some might want it well furnished. You can either renovate the cracks, leakages and other damages, or sell the house as it is to investors like home flippers and real estate dealers. A good tip would be to assess the buyer’s interest in visiting your home. A buyer that request for a home inspection is, in most cases, not looking to renovate, which means the renovation cost will fall on you.
Cash House Prices are Lower than Market Price
Cash offers for homes are, in most cases, lower than the actual market value of the house. Selling you home for cash is fast and efficient, making it a more attractive deal than mortgages. Even so, you might still make more net income because you will not pay contingency fees like title and home inspection fees.
Types of Cash Buyers in Real Estate
The types of cash buyers you find in real estate are home flippers, buy and hold investors, wealthy retirees and first-time settlers who do not want a mortgage. Knowing the one you are selling to will help you estimate a negotiable price, and gauge how fast the transaction will happen. Wealthy retirees and first-time buyers are mostly looking for a home to settle in, or a second home where they can stay during holidays or vacations. Most might request for contingencies like home inspection and home sale. Home flippers and buy and hold investors, on the other hand, are looking to either renovate then sell or rent for passive income. They might not see the need to inspect your home since they will renovate eventually. An investor’s primary interest is to get a deal that is quick and in their favour so that they can make profits.
Contingencies are Fewer
Contingencies are clauses that allow a buyer to pull out of a house buying transaction. When selling property, the types of contingencies you deal with are financing, home inspection, home sale, and title. The purpose of a contingency is to protect the buyer from financial loss if the deal fails to pan out as wanted. By selling your home for cash, you avoid financing contingency, which lets a buyer back out if he does not get a mortgage. You will also dodge a home sale contingency since you are selling to buyers with cash in hand. Home inspection and title contingencies will depend on the buyer.
The Real Estate Market Price in your Area
Knowing the real estate market price will help you estimate the best rate for your home. You can check the number of properties in your region then assess how fast they are selling. Overpricing is a common mistake made by most home sellers, often due to an emotional attachment to the house. The market trends are what will dictate how much your property is worth. Research as well on other incurred home-buying expenses, for instance, homeowners association fees and property tax. The buyer should be able to pay for these expenses, as per the requirements in your area.
Scammers Do Exist
Scammers have a sweet tongue. They will smile at you, tell you how gracious you are, and how much they love your house. Some might even start negotiation to see how acquainted you are with real estate practices and procedures. Always have your guard high, no matter how fast you want to close the transaction. Ask for proof of funds from the buyer before signing anything. You can request him or her to send a deposit to show that they are serious with the purchase. Observe how the buyer responds if you tell him to inspect the house or meet in person. More importantly, trust your gut. If it tells you that the buyer seems fishy, listen. You can always back out of the transaction if you feel doubtful.
Seek professional advice if it is your first time selling property. Real estate agents and attorneys will advise you on the legal aspect of real estate. They can also suggest multiple listing service to use for marketing. Some will go a notch higher to counsel you on the right market price for your home or even point you to real estate companies that provide cash offers for homes.
The Bottom Line
When selling your home for cash, the wheel is in your control. Now that you know the advantages, drawbacks and things to weary of, you can proceed to find someone willing to buy your home for cash. Be cautious of the scammers and do not shy away from seeking advice from a real estate advocate or agent. Lastly, assess which buyer is right for your house, then focus your attention on them.