Many sellers want to sell a house for cash because of its perks that they cannot get from traditional selling. It lets them quickly sell a property and avoid the hassles of dealing with buyers’ mortgage loans.
However, selling a home for cash also has some drawbacks. That’s why you should know if this option fits your situation or if you should proceed to a traditional transaction.
Learn its pros and cons, the common types of cash home buyers, and a quick guide on taking this home-selling choice.
Pros and Cons to Handle when You Sell a House for Cash
- Pros of Selling a Property for Cash
Selling a home for cash has excellent pros that sellers love to enjoy. These points may compel you to take this option too.
1. Selling a property to cash buyers means you don’t need to deal with mortgage lenders. So, you do not need to worry about buyers waiting for approval and commitment from their lenders, only to receive a denial.
2. Preparing your property before selling is also convenient when selling for cash. You don’t need to put your home in good shape before selling to some types of cash buyers. In most cases, home staging is also unnecessary.
3. Home selling for cash also has fewer contingencies than traditional transactions. As mentioned earlier, some cash buyers purchase properties even if it is not in great shape.
4. As a result, you can sell a house much quicker when taking this route. You can complete a transaction in only a few days, while traditional home-selling may take you a couple of months or more.
- Cons of Selling a Property for Cash
As you can see, selling a home for cash can bring advantages. However, be careful with these cons as well.
1. Selling a property for cash leads you towards significantly lower profit. Transactions can even have 40% to 50% lesser profit than regular home selling. That means you should carefully weigh if it is worth sacrificing the profit for convenience.
2. The best Realtor won’t advise you to sell a home for cash because it won’t give you enough profit. That means it’s likely for you to end up selling your property without professional help with this choice.
3. Selling a property for cash also makes you vulnerable to scammers. They will pretend as investors, ask for fees from you, but they won’t buy your home. That’s why consult a real estate attorney before dealing with any investor to ensure legitimacy.
Common Types of Cash Home Buyers
There are five primary types of cash home buyers. And you should carefully choose to whom you should sell your property.
1. Off-Market Buyers
These are buyers who want properties that are not on the listing. They buy homes as-is. And resell the property after doing minor renovations. That means you don’t need to stage your home for these buyers, and they will pay you a competitive price.
2. Instant Buyers (iBuyers)
These buyers prefer houses that are in top condition for easier reselling. They also offer competitive prices, but they will deduct particular amounts for possible repairs.
3. House Flipper
This type is suitable for you if you want to sell a house in bad shape. They will buy the property at rock bottom price, make significant renovations, and resell it on the market.
4. Buy and Hold
Some cash buyers purchase houses because they want to convert them into a rental property. This type of buyer may offer more than the other cash buyers because they may see your home as an investment. However, you may need to do some repairs in your house to satisfy these buyers.
Lastly, you can also bring your property to an investors’ marketplace for auction. Investors will bid over your home, which means you may earn a significant profit from the process.
Quick Guide on Home Selling for Cash
Now, here are a few tips to remember if you want to sell a property for cash:
1. Get the offer from the buyer. Then, consult a real estate lawyer to review the offer and your contract.
2. Check the buyer’s funds and ensure they can pay upon closing. You can do this by asking for proof of funds. Moreover, consult your real estate attorney to help you verify the buyer’s funds.
3. Open an escrow account to protect you and the buyer’s interest.
4. You should then approach a real estate lawyer, a title company, or a closing agent. They will help you through the closing day and transfer the property ownership to the buyer.
Sell a House for Cash with These Notes in Mind
You may think that selling a property for cash is an excellent idea. However, be careful to get ideal results that fit your situation. That’s why it is best to consult a professional Realtor before you sell a house for cash today.