If you’re like most homeowners, you probably consider the time and effort involved in preparing for a sale, from staging and cleaning to completing repairs and improvements.
Perhaps you’re unsure if you’ll be able to locate a suitable real estate agent or if you’d rather not utilize one. Perhaps you’re concerned about the possibility of the transaction dragging on, or worried about the financial consequences of selling a house.
Fortunately, there is a simpler method. Accepting a cash offer on a house has several benefits over the traditional sale, such as quickness, cost savings, less time, and (best of all!) reduced stress.
Why is an all-cash offer preferable, though? Continue reading to learn more about the advantages of selling a home for cash.
What Is a Cash Offer on a House?
Let’s begin with the fundamentals: What is a cash offer on a property, exactly? What distinguishes this sort of offer from a typical house sale?
You may think of a potential buyer showing up to the bargaining table with a briefcase full of cash, neatly bundled with rubber bands and stacked into thick mounds when you hear the phrase “cash offer.” While this scenario might make for an entertaining film, cash sales aren’t quite like that.
A cash offer is a transaction in which the buyer offers the seller the full value of the property without taking out a loan, such as a mortgage. You can save time and money by not going through several (long, costly) procedures when a buyer has enough cash to buy your property outright.
From the homeowner’s standpoint, it makes no difference whether the payment is made via a mortgage loan or one’s own bank account. The end result is the same for the seller: a buyer has bought your house and paid for it.
The main distinction is that cash sales avoid the numerous contingencies that might endanger both seller and buyer. That’s why, when it comes to buying a home, so many people choose for a cash transaction: They’re faster, simpler, and require less paperwork.
Benefits of Accepting a Cash Offer
A few key differences exist between traditional home sales and cash-home purchases. Let’s take a look at a few examples.
1. No Appraisal
A cash sale does not need an appraisal. In most cases, the buyer works with a mortgage lender in a traditional purchase. To minimize their financial exposure (in the case that the home buyer forecloses in the future), the lender must establish that the house they’re being asked to finance is worth at least as much as the loan itself.
In most cases, an appraisal is used to establish a home’s worth. If the appraisal value is low, the mortgage lender may decide they are unwilling to lend money for the property sale. This is one of the leading causes of house closings.
A cash sale eliminates the need for an appraisal. Because there is no mortgage lender, no one wants an appraisal… removing a significant barrier to home selling.
2. Fast Closing
What’s the difference between cash sales and traditional sales, aside from the fact that one is generally quicker than the other? Cash sales close more rapidly, from start to finish. The mortgage loan application process is usually to blame for this.
To be approved for a mortgage, most sales need to be underwritten. This time period may range from 30 to 60 days, and much can occur during that period. If the buyer’s financial situation deteriorates between pre-approval and loan closure, the lender may refuse to offer a loan or the transaction might collapse. In fact, when it comes to contingent offers failing, financial difficulties are at the root of most problems.
A cash sale, on the other hand, does not depend on the mortgage loan application process. This means home sellers are less likely to have a deal fall through and spend less time selling their house.
3. Less Risky
Cash offers are typically superior than those made using conventional financing. When confronted with a number of possibilities, sellers naturally select the buyer who appears to pose the lowest danger. The cash buyer is usually the owner of the property who wants to sell it. In most cases, that’s the case. Even if a cash offer is lower than an offer that will be financed with a mortgage, many home sellers choose a cash offer over one that will be paid off in installments.
Because the seller is aware that closing will occur sooner, he or she will be compensated sooner. There’s less of a risk of the agreement failing because you’re no longer taking out a loan.
4. Reduce Stress
Traditional house selling is a lot of hard work. You must clean, stage, improve, and repair the home. You’ll need to locate an efficient agent, deal with the appraisal and inspection process, and maintain your property spotless throughout showings and open houses. Then there’s the million and one other things to think about: will the buyer cancel or lose funding? How long will it take to sell? And how on earth do you handle all of these concerns when they’re not your concern at all?
There are numerous reasons why you may want (or need) to sell your house quickly, but perhaps you just don’t want to wait any longer. In either case, selling your home quickly alleviates some of the tension that comes with it.
5. Solve a Difficult Problem
In a divorce, do you have to divide the equity in your house? Are you required to relocate for employment sooner than expected? Perhaps a quick home sale would prevent foreclosure or allow you to liquidate assets to pay off debt.
Whether it’s because you can’t afford to pay your mortgage, need money for a new business venture, or have an emergency that requires fast cash, taking a lump sum of cash on the spot might be beneficial.
6. Save on Repairs
The inspection draws attention to necessary repairs in a typical home sale. In most situations, the property seller must either pay to fix problems or reduce the asking price appropriately.
In a cash transaction, you simply sell as-is. You’ll save money on repairs and upgrades… especially when compared with returns on investment. What’s better, you don’t need to clean or set the property before selling it.
Where Do You Find a Cash Home Buyer?
You’ve probably already learned about the advantages of taking a cash offer on a home, but where do you locate a cash buyer? Here are some examples of cash buyers:
- Real estate investors who buy houses, remodel them, and then sell them (also known as “fix and flip”) or keep them as rental properties
- Homeowners who have recently sold their house and are using the proceeds to purchase a new home
- Retirees who invest their resources in a house rather than paying mortgage interest and fees
- Those who are wealthy enough to pay cash may buy.
- iBuyers who are willing to pay full cash for houses that are for sale in your local area
- Companies who buy houses for cash no matter its condition
A cash offer may be helpful if you’re thinking of putting your house on the market. Cash sales provide advantages including faster closings, lower costs, and less stress. If you’re ready to learn more about the benefits of a cash sale, get in touch with us right away.
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