How To Sell My Home For Cash?
If you are savvy to the real estate market, you have probably heard of the benefits of a cash offer. Anything with cash right in the name has to be good, right?! –The short answer is maybe. Let’s walk through the benefits of a cash offer, and any potential cons.
1) Quick closing time frame
Long escrow periods, leave time for deals to fall apart. This is not the case 100% of the time, but the ability to close in a week or two, beats the market average by about 2-3 weeks. It heads off “cold feet” on behalf of the buyer, and gets the deal across the finish line quicker.
2) No appraisal contingency
In 2020 when the market was hot, many buyers were going thousands of dollars over asking in order to procure a property, only to fall subject to a short appraisal, and having to renegotiate the deal. An appraisal is the banks’ way of ensuring the property is worth what it was being sold for and a good investment. If the bank is only loaning 200k and the client bought it for 210k, there is $10,000 dollars worth of money that has to be accounted for, either by a discounted price for the seller, or the buyer coming up with the additional funds. With a cash offer, if the client overpays by $10,000, the deal is still moving forward, full steam ahead.
3) No financing contingency
With no financing contingency at play, the buyer could lose their job in the midst of the transaction, and would still have to move forward with the purchase which creates less risk for a seller.
4) Less negotiation
It is fairly common for deals to include some contingencies related to closing costs. With a cash offer, there are no closing costs to haggle over, and the deals tend to be very straight forward.
Without having to account for some of these hurdles, it is no wonder why cash is king in real estate and these types of deals are at the top of the food chain.
However, there are some cons to consider. Most cash buyers understand that they have a fair amount of leverage. It is up to the seller to decide what this peace of mind is worth. Is it 5k, 10k, 15k, more? If I had a financially sound buyer who was willing to give me close to asking price versus a cash buyer who wanted a hefty discount off, my decision would be to go with the higher offer. At this point, even if the deal falls apart, my carrying costs would not outweigh the lower offer. This is personalized to every person, and what their tolerance is to the risk, but definitely worth thinking about and considering.
Who is buying homes for cash?
If you have a buyer who has approached you about buying your home for cash you should consider these questions first.
Will this be an owner occupant, or a company/corporation? In any of these scenarios, it is always a good idea to get a second opinion. I have had a handful of occasions in my real estate career where clients feel adamant that they know the value of their home, only to by off by thousands. In one case, my client was off by 35k. So, if you are approached by a company, please note that they often times make their money by getting your home for a deal and turning around and selling it at market value.
Is It Easy to Find Cash Buyers?
The short answer is no. Of course cash buyers exist, but I think most realtors would tell you that they are a very small percentage of their business deals. So, if you think that you might try selling your home because you can feel confident in finding a cash buyer, you might have a calling in real estate because that would be considered a super power!
Why Sell A Home For Cash?
I have found that many clients want to sell the home for cash due to their concerns surrounding home inspection. More often than not, there are solutions to just about any home inspection that don’t require a money out of pocket solution. Some of my past clients have expected thousands in repairs to their home, only to get to inspection, with a small amount of inspection items. Again, a real estate agent has seen it all, and can tell you what to expect!
All this to say, if you are wanting a cash offer, your best bet at it would probably be to list your home with an agent and see what happens. Would I plan on receiving a cash offer–absolutely not, but agents are paid to navigate your transaction and get you across the finish line with the most money in your pocket.
Interested in hearing more about how to procure the most money in a real estate transaction? Contact Allison Hart!
Phone: 515-210-5198
Email: [email protected]
Website: allisonharthomesales.com
