When it comes to real estate, being a seller is almost always a better position to be in than being the buyer. Unless you live in a very remote area where not many people are looking to buy a house, you should not have a problem finding someone who is willing to purchase your property.
Not all buyers are equal, though — the most popular method of financing a house purchase is a mortgage, and there may be quite a few problems associated with that, not to mention the length of the process of getting a loan. You’re running the risk of locking down on a buyer who might pull out at the last minute due to a problem with their bank, in addition to the lengthy and inconvenient procedure of reporting everything that is wrong or unusual about the house. Mortgages are tricky beasts — there are a lot of people involved, and the deal could go awry at various stages.
However, there are times when sellers are approached by people looking to buy a house for cash, directly from the owner and without any intermediaries. This type of deal eliminates most of the problems associated with waiting for buyers to get their mortgage loan, and you’ll be able to receive the money almost immediately after agreeing on the terms of the home sale.
There are plenty of benefits of accepting a cash offer for buyers and sellers alike. Buying a house in cash saves a lot of the headache associated with trying to get the funds in, and allows the two parties to reach an agreement quickly and without too much confusion.
Less Associated Costs
When you put your home on the market and take the traditional route of hiring a real estate agent with open houses, appraisals, and all of the other ordeals that usually come with the process, you’re looking at potentially thousands of dollars of unnecessary costs. The Realtor fee is going to make up for a significant portion of that, not to mention the closing costs, which could be even larger if the buyer decides to hire an intermediary as well.
Cash offers eliminate most of these processes. In many cases, you wouldn’t even have to get your home appraised! This leaves the sale free of additional costs and ensures that most of the cash will end up in your pocket.
Much Less Paperwork
Until you begin trying to sell your home, it’s hard to realize just how much paperwork and signing on dotted lines the entire process is composed of. It begins with signing off on your real estate agent’s appointment, getting the right appraiser, accepting his estimate of the worth of your home (on paper, of course), filling out all of the paperwork related to your agent’s fees, and finally sealing the deal once the person buying your home gets all of their finance in check and is ready to follow through with the offer.
In fact, the only person with more paperwork to complete than the seller in this scenario is the buyer, who has to gather up all of the documents required to receive a mortgage loan, some of which date many years into the past.
Short and Swift Negotiations
Some people really love to haggle over anything and everything. If you’re not one of them, then the thought of having to negotiate the right price for your home that falls within the official appraisal range may scare you more than a little bit. Most buyers feel the same, especially when they’re not cash buyers and have to get a mortgage. Every dollar counts, and an asking price that is too high may be the final straw that prevents them from following through and buying your home. After all, their credit score is not unlimited, and banks may simply refuse to finance the purchase if you overdo it at the negotiating table.
Cash buyers don’t have the luxury of being able to haggle over the price — most of the time, their first offer is also the final one. They won’t negotiate, not because they don’t want to, but because their offer consists of the exact amount of money they are able to pay for the home. It’s up to you to take it or leave it. It may be less money than if you had hired a Realtor, but remember — the final amount would be much less than it was on paper anyway, due to additional costs on closing and during earlier stages of the sale.
No Need to Worry About Costly Repairs
Most of the time, accepting a cash offer is enough to lock down a home sale and sign off the property “as is” to your buyer. As opposed to cash buyers, those who need to take out a mortgage to buy a home would want you to perform thorough checks of the property and make sure that there aren’t any technical deficiencies at closing. If any shortcomings are discovered as a result of this inspection, you’re going to have to cover the cost of fixing them. The value of your home will also probably decrease in the process.
A cash buyer won’t ask for inspections or anything of the sort — once the sale is done, they will fix up all of the faulty parts themselves. Most of the time, cash offers are made by house flippers who will renovate the entire property anyway, just to make a profit off of selling it at a higher price.
The Bottom Line
Saying “yes” to a cash offer on your home may be a difficult decision at first, but if you weigh out all of the pros and cons of closing a sale all by yourself, the picture will become crystal clear. If a cash offer that is good enough comes your way, you should accept it. The benefits outweigh the disadvantages by a large margin, and you’ll have the certainty that your house will get sold, without the risk of a deal falling through at the last minute.
Even if the cash offer turns out to be less than you might get off of a regular home sale, with agents, appraisers, and other intermediaries working on the deal, the final amount might not be so high, after all. Once you deduct all of the fees associated with these types of transactions, you’ll stand to profit more from accepting the cash in most scenarios.