How to Sell a House for Cash
Selling a house for cash sounds like a more daunting task than it actually is especially to young and first-time homeowners. If you’re planning to sell your house for cash, the most important thing you will need is to be equipped with correct and adequate know-how. Let us get you started with some vital information.
In a study conducted by the National Association of Realtors in May 2018, it was found that cash sales account for 21% of real estate transactions that month. Cash sale transactions tend to go up and down by a small margin but research yields consistent results: that a significant percentage of home sellers prefer selling their house for cash. The reason behind this is that selling a house for cash yields more advantages than disadvantages, which is almost always an attractive proposition.
Advantages of Selling a House for Cash
1. Less waiting time
According to ATLFairOffer (a home buying service in Decatur, Georgia), selling a house to a cash buyer yields faster results than putting the property up for sale in the real estate market — even with a high-performing sales agent. A cash buyer is often a sure buyer.
2. Fewer chances of delay or cancellation
With cash sales, you do away with the tedious process of dealing with bank loans, real estate appraisals and mortgages, meaning that you do away with denials and face fewer chances of delay.
3. No expensive, time-consuming and stressful repairs
Selling a house for cash offers the convenience of selling the property “as is” and not having to worry about repairs and remodeling.
4. No contingency clauses
Contingency clauses protect home buyers in case certain conditions are not met, however, these can be quite disadvantageous to sellers. For instance, a real estate agent might make you a great offer for your home but only if the property is sold within a definite amount of time.
5. No commissions
No agent, no commissions, period.
However, do not let these advantages easily sway you into selling your house for cash. Remember: to every advantage is a disadvantage, and this must be wisely taken into consideration.
Disadvantages of Selling a House for Cash
1. Expect low offers
Cash buyers purchase houses not to live in them, but to have repairs and upgrades made and sell the properties for a much, much higher price – a procedure called “house flipping”. House flippers buy houses for the lowest price they can in order to make the most profit. According to Business Insider, the average profit that house flippers made in 2017 was $69,500 per property.
2. Selling a house for cash requires more caution.
Anybody can buy a house for cash; it does not require a license or any other special legal procedure, thus it means low to zero protection for the seller. This premise attracts scammers including identity thieves. Make diligent background checks and always check your credit history.
Important Tips to Remember Before You Sell Your House for Cash
1. Wait for the best deal before you say yes.
People who buy houses for cash prey on desperate home sellers such as homeowners facing divorce, foreclosure, relocation, etc. These cash buyers will offer an average of just 65-80% of your property’s fair market value. Unless you’re looking to get rid of your house fast, shop around for a good price before you say yes.
2. Transact only with reputable cash investors.
A license may not be required for companies that buy houses for cash but remember that there are other ways to validate credibility and reputation. Ask around for testimonials and recommendations.
3. Shop around for sell-your-house-for-cash companies that work around your terms.
Make a list of your terms and conditions and shop around for a sell-your-house-for-cash company that meets your requirements. Take note which among your requirements are strict and which can afford a compromise.
4. Transact wisely.
Do not be easily swayed by figures and fast transactions that you neglect to protect yourself. Ask for proof of funds before you get into a contract and make sure to read the fine print before you sign. Watch closely for clauses that may change the terms of your sale or cause the sale to go higher or lower.
5. Consider that selling your house for cash is not always the best option.
Think of why you want to sell the house – need cash, property just gathering dust or facing a tragic divorce? Consider options other than just selling your house for cash. If you’re not in a hurry to make cash out of your property, you may opt to rent the house to a family or even just the rooms to students, yuppies or couples. This way, your house still earns money while you weigh out your options and make the smartest decision about your home.