Call us today to get a no obligations quote for your house, or just to get your questions answered. Although it does happen at times, it is a rarity. The benefits of cash buyers are numerous, so when I want to move on quickly I’m selling my house to cash buyers. Although the contract amount of an investor sale will likely be lower than what you could get in a traditional sale, you could save on some ancillary costs. The seller or real estate professional accepted and deposited the check. It will likely be held at a title company, and you’ll sign the same documents as you would in a traditional sale, such as the deed, settlement statement and any property disclosures — minus the mortgage and financing documents. Sherry Davis Zander began writing professionally in August of 2006. “That will depend on your situation — someone who is going through a foreclosure or who has a vacant house would value cash a lot more than someone who just wants a bigger house,” Steinemann pointed out. Here’s How Much Money You Need to Build Your Dream Home. “By getting a quick cash sale and closing, you could have a better bargaining chip for the house you want,” she says. Unfortunately, many homeowners have little to no experience working with we buy houses companies. Qiu warns against cash buyers who make offers with only a very low earnest money deposit. You’re likely considering the possibility of a cash sale for any number of reasons: We spoke with some experienced investors and real estate agents to identify some of the most appealing aspects of working with a direct buyer, as well as some of the drawbacks. Does the buyer have a good track record of closing transactions? How to Complete Commercial Property Transactions, Cleveland: Beware of Cash Offers for Homes: Fake Check Scam Targets Sellers, Title Agencies, The Independent: Property: Beware the Cash Buyers. Every seller’s situation is unique, but for many, the perks of a cash sale can be well worth the sacrificed equity. When Must a Resident Be Informed of a Foreclosure? “Plus, the seller is often asked to support buyers with closing cost concessions, pre-listing repairs and updates, post-inspection repairs, and possible extended hold times, all of which can add up to substantial costs.”. Selling your house for cash is exactly that; it promises cash in hand instantly. She achieved her Bachelor of Arts in management and human relations in 2004 from MidAmerica Nazarene University. The standard selling process most homeowners encounter is fairly straightforward. Herzberg also suggests asking for proof of funds, which might be a simple bank statement or a letter signed by a bank officer, to confirm that the buyer has the available funds to complete the purchase. As Nebraska real estate agent McCoy points out, by taking a cash sale on your current house, you’ll be in a better position to secure your next home, because that seller won’t have to wait around on any contingencies or financing delays. Learn their tactics to ensure you sell your home to an honest buyer. Scam artists' strategies are sometimes obvious, but others are more subtle and difficult to detect. What is a cash offer on a house? “Buy and hold” investors intend to hold onto the property for an extended period of time, usually with the intention of renting it out. The money could originate from illegal activities, such as the sale of drugs and money laundering. That means that you’ll get an offer with far fewer contingencies (you won’t need an appraisal to appease the bank , nor will the buyer need to sell their existing house before they can get a loan, for example). “These are signs that the homeowner is dealing with a wholesaler that intends to sell the contract to a third party instead of buying themselves, and can easily walk away from the transaction if it doesn’t work out,” says Qiu. When my family and friends ask me for referrals when they want to sell their homes, I advocate for cash buyers every time. Some cash buyers will waive the home inspection, while others will still opt to get one, and may negotiate the contract price to cover any required repairs. Despite any possible delays, “a cash sale will always be faster than a conventionally financed transaction in the same situation in the same municipality,” says Machado. Forget waiting months to move on from your home; selling to cash buyers means being able to find your next home with ease. The seller can choose to sign and accept or have an attorney review the terms. “Usually, sellers for cash sales are okay with a two-week close,” says Qiu. You need to sell fast to accommodate a relocation or other change in circumstances. Be wary of any buyers who show no interest in seeing your home in person and who only correspond via email, as those could be red flags of a scam. Sign the contract. Many investors pay cash for every home they buy. What’s worse is the buyer’s ability to weasel out of a purchase agreement without penalty due to clauses and contingencies, leaving the seller stranded and starting the selling process all over. They talked me through any questions I had and showered me with references from other sellers. The absence of a loan reduces a lot of the unknown on your end as a seller, and — the good news is — you can skip the stagings and showings rigamarole. In virtually all cases of fraud where a home was paid for in cash, the buyer rendered a check. I began considering other options because utilizing the services of a realtor wasn’t a good solution for my hard time constraints. I asked trusted family members why, and they admitted to not knowing any local cash buyers, not recognizing the advantages, and not understanding the general cash buyer selling process. After researching local real estate agents that came highly recommended, I realized the average realtor couldn’t promise a sale real estate closing within a specific timeframe; waiting months of a potential buyer to purchase my home wasn’t an appealing outcome. Thankfully, selling my house for cash meant selling without making any costly remodels or renovations. In this case, proceed with caution. “It depends on the market hold times and costs, but sellers may expect to leave on the table anywhere between 8% to 15% of what they would have projected to get from a successful retail sales process,” says Aponte. An extended inspection period is another red flag. Do You Pay Earnest Money if You Go with the FHA? Thankfully, selling my house for cash meant selling without making any costly remodels or renovations. In a case like this, follow the money trail and ensure that it is in your account before providing any refund of payment. “Cash buyers can close in as little as a week, where traditional financing can take a month or more,” says Steinemann. The process of selling your house and moving into a new one can be exhausting and time-consuming. After accepting a cash offer, Mike Qiu, a “fix and flip” investor in the greater Seattle area and owner of Good As Sold Home Buyers, says the rest of the transaction is very similar to a typical home sale. “For example, for a $400,000 house, the deposit shouldn’t be $1,000.00 — it should be closer to 3%-5% of the purchase price.”. I determined the closing date, kept the traditional realtor’s commission, and approved a cash offer I felt to be fair. The seller or real estate professional refunded the amount of the check. Shrewd investors almost never pay full price for property, and neither do most discerning buyers. “They would do this if they know their price is so good that anything wrong with the home is not an issue, or if they are planning on tearing down the home and the land value is all that matters to them,” he explains. In one case, however, the buyer seemed credible. One of the benefits of going through Simple Sale is that all of our cash buyers have been pre-approved and vetted before gaining access to our platform. The process of selling your house for cash is one of the simplest ways of selling your house. One of the latest scams occurs via email communication. With cash buyers, I wouldn’t have to wait for a lengthy financing period because they had cash on-hand to purchase my property. Who has the time or money to hire a realtor, prep for the sale, and deal with long days of putting their house … When the purchase of a home is haggle-free, it may not always be legitimate. I felt it necessary to explain why I was selling my house to cash buyers. Your house needs extensive repairs or upgrades that you can’t or don’t want to subsidize. Selling a house for cash: How does it work? Previously, she worked for Sprint as a project manager. Posted on May 27, 2020October 22, 2020 7 min read, “A lot of sellers think selling a house ‘for cash’ means the buyer is going to show up with a briefcase full of money for them, but that’s not the case,” says Lucas Machado, a real estate investor and owner of House Heroes, LLC. This was great for me to relocate. Another aspect of a real estate closing is the municipal lien search. By law, businesses must report to authorities any cash payment over $10,000. © Copyright 2020 Hearst Communications, Inc. How Long Can a Landlord Hold a Rent Check? When it comes to subject matter, Zander writes the gamut. “A cash buyer might make an offer that’s close to list price, but then they often ask for pricey repairs at the inspection stage,” he explains. Real estate agents work with multiple homeowners simultaneously and often cannot afford the time and dedication needed to sell a property most proficiently; cash buyers, on the other hand, are less burdened by multiple sellers because they guarantee speedy home sales. In addition to speed, a flexible schedule is another benefit of a cash closing. “They usually know their numbers and won’t buy emotionally, unlike most first-time homebuyers. Header Image Source: (Colin Watts / Unsplash). On the other hand, if the house isn’t in great shape, he suggests taking the approximate value of the updated houses in your area, subtract what it would cost to get your house to that condition, deduct the commission, subtract the investor profit (usually 15%), and that will arrive at a fair price. After, they present the cash offer to the homeowners, the sellers can choose to close at their earliest convenience. This atypical selling house for cash process begins with a homeowner deciding to sale. What is the process of selling a house for cash? Here’s what a cash offer in real estate is and how it changes the home-buying process. “Although appraisals vary quite a bit and aren’t an absolute guarantee, it could help if you’re really struggling to pinpoint what would be a good price,” she says. Kevin Kendrick, a top Orlando agent who sells homes 45% faster than average and is also a certified iBuyer, sometimes sees reasonable cash offers come in for his sellers, which can be exciting at first — but that offer isn’t set in stone until the contract is finalized. At Harmony Homebuyer, we specialize in quick home sales for cash. I chose to sell my house to cash buyers because the process was more secure than the standard, and I knew I wouldn’t be let down. Another unique benefit to selling my house to cash buyers was their desire to purchase my home in whatever current condition. We’ll get your house closed, and write you a check on the spot! Ethical Behavior for an Apartment Manager, The Disadvantages of Selling Property by Auction. “In a retail market sale, most of the transactional costs, such as agent commissions for both listing and buyer’s agents and closing costs for escrow, fall on the seller,” noted Johell Aponte, founder and acquisitions manager with Move On House Buyers. There have always been investors interested in buying bargain houses… Is the buyer using a standard contract? My cash buyer was a friendly professional and assisted me throughout the selling process without payment. Cash buyers share a few common traits: they don’t need lender financing to pay for your house, and typically they will buy your house off-market. Once an investor or iBuyer has presented you with a cash offer, how do you know it’s a fair number? A cash offer is when a home buyer offers a seller the entire cost of the house, with no mortgage or any other type of financing involved. “Depending on the condition of the home and the amount of repairs and updates it might require to list at market value, sometimes the seller is able to come ahead with a cash sale — not only in reduced stress, but also financially, especially for homes that are in older neighborhoods and have appreciated greatly.”.