Are you trying to navigate the housing market? Did you know that there are benefits to selling your house for cash? If not, you are about to learn about cash offers and the benefits of selling a house for cash.
Let’s begin with discussing cash offers and how common they are. Then, we will look at the five main benefits of a cash offer on a house.
What Is a Cash Offer?
Most of the time, when you think of selling your home, you think of the traditional process. You market your home, buyers parade through at showing after showing, and then you receive an offer contingent on the buyer obtaining adequate financing. Have you considered the possibility of selling your house for cash?
A cash offer happens when a buyer pays the entire selling price without getting financial backing (in the form of a mortgage). If you imagine someone showing up on your doorstep with armloads of cash, that isn’t how it typically works. However, cash offers aren’t unheard of, and there are benefits to accepting cash offers for homes.
Who Makes a Cash Offer for a House?
A home is a large ticket purchase, so not every buyer will have enough cash to purchase a home outright. Typically, real estate investors are the most likely to recognize the benefits of a cash offer on a house from both the buying and selling perspectives.
Those who make a cash offer for a house usually fall into one of two categories. On one end of the spectrum are the investors who like to fix and flip a home for a profit. They buy houses that need extensive repairs and then renovate and resell them.
The other end of the spectrum has people who are independently wealthy or just made a significant profit on their own home sale, or perhaps those who inherited a large sum of cash. Those people see avoiding dealing with banks as an advantage of a cash offer on a house.
More average home buyers are making cash offers than in the past. Average home buyers are less likely to waive the contingencies of a sale, such as appraisals and repairs. They also may not have the total asking price in cash but may offer a smaller portion of the full price in cash and then complete the transaction with a mortgage.
Are Cash Offers Common?
The nationwide average for cash home sales in the US is between 22 and 24 percent of single-family home sales. Some parts of the country average even higher than that, with 32.9 to 40.4 percent of overall sales coming from cash sales. A cash offer for a house can happen at any time in any selling scenario, so it’s best to be prepared for those kinds of transactions.
Selling a house for cash depends on the current real estate market. Interest rates also make a difference in the prevalence of mortgages versus cash sales. Some buyers have been known to pay cash and then finance later when interest rates are low.
Benefits of Selling a House for Cash
There are benefits of a cash offer on a house for both the buyer and the seller. Our focus is on the benefits of a cash offer on a house for the seller. Here are the top five benefits of selling a house for cash.
1. Less Stress
When you sell your house for cash, there is less paperwork, fewer people in the equation, and typically, less money is required. Things like appraisals and home repairs may be waived by a cash buyer, making the upfront out-of-pocket costs lower.
In general, selling a home is more manageable when you accept a cash offer. There is less stress involved for both the seller and the buyer.
2. No Need to Make Repairs
In a typical real estate transaction, the seller is required to have an appraisal and home inspection. Those cost money and can lead to the need for repairs to the home before it can be sold. Selling a house to a cash buyer changes that process somewhat.
Depending on the buyer, you could avoid repairs altogether. If an investor who plans to flip the house is making the purchase, you likely will not have to worry about repairs because they buy homes in any condition to renovate and resell. Even if the house needs significant repairs to electrical or plumbing components, you could avoid making those repairs and put your money elsewhere.
3. You Get the Money
You cut out the middleman when selling a house to a cash buyer. There is no real estate agent to get a commission. There are typically no appraisal fees and no escrow to worry about. That means you get all the money from the sale.
4. Fewer Sales Fall Through
Have you ever heard of a home sale falling through at the last minute? Typically, that can be due to a mortgage not being granted or some other contractual contingency not being met. However, sometimes a buyer just decides not to purchase the home after all.
When you sell a house for cash, the transaction usually occurs quicker than a transaction involving mortgages. There are fewer contingencies to meet, so fewer sales fall through.
5. Faster Closing Times
The home selling process takes a month or more to complete when lenders are involved. There is simply more involved in the closing process. When you sell a house for cash, the closing process takes approximately two weeks. That two-week period is simply because of the time it takes to complete and file the necessary documents to complete the sale.
Faster closing times mean you can move into your new home quicker. This is especially helpful if you’ve been transferred to another location due to work commitments.
How does a cash offer benefit the seller? Selling a house to a cash buyer is less stressful for both parties involved in the transaction. The seller retains the money from the sale, often without having to complete repairs or have a home inspection or appraisal. Closing is faster, and the seller and buyer can move forward with their lives quicker.
Greg Buys Houses is a company that purchases residential real estate for renovation and resale at a profit. Offers are made to sellers based on market value and repairs needed. Greg Buys Houses will do everything possible to bring forth the highest possible offer to give the seller the most benefit from dealing with a fast sale. We buy houses in the following areas –
