Selling Your Home For Cash – Is It Right For You?
What are the real advantages of selling a home for cash? How do you find the right cash buyer for your home?
When is comes time to sell your home you have three main choices in who you will sell to:
- Borrowers needing a mortgage loan to afford your home
- Buyers requiring seller financing from you
- All cash buyers
Getting all cash for your home doesn’t just sound better. There are some very good reasons it is typically the more attractive and profitable option too, whether you are based in Long Island, New York or El Paso, Texas … this is highly relevant to you and your wallet.
Why Sell Your Home For Cash
Here are just some of the top reasons home sellers prefer or must sell their homes for cash, instead of to financed buyers.
A cash home buyer can typically close within just a couple of days. This is on contrast with what can be months for a typical borrower who is relying on a traditional bank mortgage to buy your home.
There’s nothing that really holds a cash buyer back. They may have to wait a couple days for title, or bank transfers if there is a weekend or holiday involved. Though those needing a mortgage at held ransom at the whim of lenders and changing market conditions every hour during the process. A financed buyer can fall out of the transaction due to appraisals, inspections, paperwork quirks, insane underwriting demands, government shutdowns, severe weather, or just getting cold feet or their situation changing because the transaction takes so long. The last thing you want as a seller is to wait till your anticipated closing date, only to have to go back and start from scratch and relist your property. There is no telling what the market will be like then. If you are waiting on a financed buyer you life is really on hold until it is closed and the money is in the bank. Even then, in some circumstances lenders have been known to demand their funds back if they don’t like the file upon review of the closing documents.
Reduce Risk & Cost of Holding
The truth is that each and every day you hold onto a home it is costing you money and is weathering a large variety of risks. Even an extra 4 weeks of waiting for a financed buyer can mean rising interest rates will disqualify them, or you from buying your next house. A storm, fire, vandalism or a neighbor selling cheap or going into foreclosure can devalue your home by hundreds of thousands of dollars. It can mean extra mortgage payments, insurance payments, taxes, utilities and more.
Most cash buyers are willing to purchase your home just as it is. Meaning they aren’t relying on a lender to approve financing a property that may need repairs or improvements. Mortgage lenders can be tough. There are many properties they simply won’t finance due to even seemingly minor and inexpensive repair needs. This often doesn’t surface until late in the transaction.
Mortgage Lending Restrictions
There are many other properties which are very difficult or virtually impossible to finance with a normal bank mortgage as well. This can be true of communities with high concentrations of investment properties, or where the community doesn’t have adequate financial reserves. Units in communities that are involved in legal disputes. Neighborhoods which lenders have red lined due to fraud risk. Or prices that require too small or too large of a loan.
What Does Selling a Home for Cash Really Mean?
Just to be clear, when you sell your home for cash it doesn’t mean that someone is going to show up at your door with a suitcase full of cash. It means the buyer has the cash in the bank to cover the entire purchase price and closing costs. That money will typically be transferred through a local title insurance company or real estate attorney’s office and held in escrow for the actual closing.
Why Don’t All Sellers Demand Cash for Their Homes?
With all the risks of not doing it, and all the benefits of selling a home for cash you’re probably wondering why everyone doesn’t insist on it.
Well, for a start, many homeowners just haven’t been educated on these pros and cons. Rising property prices have also forced more would be buyers to use financing. Some who can afford to pay cash prefer to leverage their capital. Though, perhaps most significantly, most sellers just haven’t known how to find cash buyers.
There are many important and valuable advantages of selling homes for cash versus to financed buyers. Do the math for yourself. If you can get a cash offer, it will lower your risk, and speed you on the way to the rest of your life. There are cash buyers out there right now looking for homes like yours. Find out how much you can get for yours today…