Selling your house on the traditional market can be confusing and time-consuming. On top of that, you may be downsizing, relocating, or selling an inherited property. With nearly 70% of home buyers preferring to purchase a move-in ready property, it can be challenging to find a buyer if your house isn’t in perfect condition. And you may have a constrained timeline and want to speed up your sale, instead of spending weeks or months on the market looking for a potential buyer. Many people turn to cash offers when they want a faster, simpler home sale.
What are the benefits of selling your house for cash?
Getting a cash home sale can be beneficial when you want to:
- Get a quick transaction: When you sell your house for cash, you can speed up your selling process. You avoid listing your house, marketing it, and showcasing it to potential buyers.
- Minimize selling expenses: Time isn’t the only thing you save. You don’t need to worry about staging costs, home repair and renovation costs, or commissions when you choose to sell to a cash home buyer.
- Save on closing costs: Selling to a cash home buyer means that you get to minimize your closing expenses as well. Many cash home buyers are often willing to pay some of the closing costs and fees.
What are the downsides of selling for cash?
There are some drawbacks to getting a cash home sale. When you sell your house for cash, you may have to deal with:
- A lower selling price: You often won’t get the same price for your house as you would if you sold on the traditional market with a real estate agent. However, if your house is older, needs repairs or renovations, or is located in a slow market, selling quickly to a cash buyer could be the right fit for you.
- Less buyer competition: You may not have multiple offers from different buyers. This limits your opportunity to get a better selling price.
- Prevalence of scams: There are many house-buying companies, and not all of them are legitimate. You will need to vet different buyers to find one that best fits your needs.
Who buys houses with cash?
When you want to sell your house for cash, you can sell to:
- House flippers: These are individuals or companies that buy homes at low prices in order to repair and resell them for a profit.
- iBuyers: iBuyers are companies that buy houses exclusively online with instant cash offers. Unlike house flippers, iBuyers are typically looking for houses that are in move-in ready condition. While iBuyers offer speed and accessibility, they often come with additional fees for their convenience.
- Cash home buyers: These are real estate companies that buy houses for cash. There are many different types of cash home buyers, both national brands and local home-buying companies.
You should take into account the condition of your home, its physical location, and anything else that may affect your sale. Your home sale expectations will determine which option is best for you.
What’s the process when selling a house for cash?
Not every cash home buyer is the same, but the process of getting a cash offer on your house doesn’t change much between buyers. When you sell for cash, you will:
- Show your house to a cash buyer: The first step in selling your house, regardless of financing, is to have a buyer look at your property. This will often be conducted in person, but if you work with an iBuyer, you may also submit photos and videos online.
- Receive a cash offer: Once potential buyers view a property, they can make an offer. Offers from cash buyers are often based on property condition and location, as well as the state of the local real estate market.
- Sign over your title: Just as when you bought your house, there will need to be a transfer of ownership. Your title company will work as the intermediary in your home sale and can provide escrow services by holding the earnest money deposit.
- Receive a wire transfer: Upon closing, you will receive a wire transfer or a check from the buyer. The buyer will send the funds to the title company, which will then send them to you.
How do you know if a cash offer is legitimate?
It’s important to find a reputable cash home buyer. When vetting offers from cash home buyers, you’ll want to ask the buyer to provide proof of ability to purchase. Proof of funds shows that the buyer can back up their offer, and they aren’t trying to scam you.
To make sure the cash buyer you are selling to is legitimate, you should also check references thoroughly and across multiple platforms. You’ll want to validate that they are a member of the Better Business Bureau and check their ratings online.
How much do cash home buyers pay?
You may be wondering if you can get market value for your home when you sell to a cash buyer. The fact is that most cash buyers will pay less than traditional buyers. According to a study done by the University of California San Diego Rady School of Management, cash home buyers pay an average of 10% less than traditional buyers.
A 10% reduction of your home value may sound like a lot, but you’ll avoid some home-selling costs by selling to a cash home buyer. You won’t have to pay commissions, which are traditionally around 5%–6% of your home sale price. You also don’t need to worry about marketing, photography, or staging costs, and you can often avoid paying closing costs.
How long does it take for a cash buyer to close?
One of the main reasons people turn to cash home buyers when looking to sell their houses is because of the fast turnaround time. When you sell your house for cash, the buyer often waives the appraisal and inspection. If they are not waived, these processes will be streamlined. Cash home buyers differ in exact closing timelines, but most give their sellers the option to close in under a month.
How do you know if a cash offer is a scam?
When you’re selling your house for cash, you’ll want to be wary of real estate fraud. According to the NAR (National Association of Realtors®), nearly 1 in 4 people involved in real estate transactions were targeted by fraudsters.
You’ll want to be on the lookout for:
- False claims
- Asking for payment before closing
- Random/upfront fees
- No property assessment
- Phishing
The best way to make sure you don’t fall for any cash-buying scams is to do your research.
Do you still need a real estate agent?
You can always opt to work with a real estate agent to assist with your home sale if that’s a better fit for you, even when you sell for cash. An agent may be able to provide you with guidance during the process. They can recommend cash buyers, review any offers, and assist with the entire sale. However, keep in mind that you will still need to pay a real estate commission if you involve an agent who finds your buyer.
Get a fast offer from HomeVestors®.
When you want a cash home offer, there are many companies to consider. It’s important to understand how each one operates. We simplify the process by buying houses as is, meaning your property doesn’t need to meet the inspection requirements of a traditional 30-year mortgage. HomeVestors® has been in the business of buying houses for over 29 years, and in that time, we’ve helped more than 150,000 homeowners get a fast, convenient home sale.
With our 3-step home-buying process, we can sometimes take you from offer to closing in as little as 3 weeks. If that seems too fast, we work with our sellers to determine a closing date that fits their needs. We don’t charge commissions or any additional fees, and we pay all typical closing costs.† You can sell your house as is to us, letting you avoid any repairs or renovations that you may need to make in order to sell on the traditional market.
Do you want to speed up your home sale and sell your house fast? Contact HomeVestors® for a free consultation about getting an offer from one of our local property buyers in your area.
