Selling a home can be a stressful experience. Sometimes, finding the right buyer can be difficult. The timeline can also drag on as you wait for the buyer to get funding approval and as you wait for the appraisals and inspections. Finding cash home buyers is a good option if you need to sell your home quickly. While this might not be suitable for everyone, there are advantages to choosing this method. If you are ready to sell your home, it’s helpful to understand how selling to a buyer for cash works and why it might be right for you and your situation.
What Does It Mean to Sell to a Cash Buyer?
A home is likely the biggest investment you will ever make. When market conditions are good, the equity in your home could yield handsome profits when you sell. Traditionally, people buy homes through a mortgage, where a financial institution lends them the money, and the buyer pays this off over time. When a cash buyer purchases a home, they do so outright, without a mortgage. In this scenario, the buyer has enough funds to cover the full cost of the home. For a seller, the sale proceeds end up in their bank accounts in either case.
Closing Goes Quickly
In a traditional transaction, weeks or months can pass from when a seller puts a home on the market until the closing date. However, if you need to sell your home fast and receive the funds from the sale quickly, selling to a cash buyer makes sense. Using a cash buyer skips the need to have a mortgage company in the process. Closing can happen within seven days in many cases. This can benefit people who need to relocate to another town for work or other needs or for sellers who need cash urgently.
Less Preparation Necessary for the Seller
When you’re selling to a buyer who’s financing, you have some important steps to take. For example, you’ll want to order an appraisal, tidy up the home well, or even make minor renovations or repairs. There is also an inspection that typically takes place. These events take time, money, and effort. Though important, they can also be a hassle and disrupt your daily routine while you wait to sell. With cash-buying, you can skip all of these tasks.
Furthermore, you won’t have to worry about staging your home to prepare for open houses and to show it to prospective buyers. The cash buyer will buy the home as is. A significant advantage here is that the process is nearly stress-free and doesn’t have many of the annoyances that traditional selling sometimes has.
There Can Be Less Risk
It is not uncommon for home-buying transactions to fail. Financing can fall through, buyers back out, or inspections can go awry, delaying or killing the home sale. With a cash offer, it is much less unlikely for problems to arise and delay or thwart the closing. The reason is that cash buyers are prepared with the full amount of the sale price. Funds are verified, and the money is wired to the seller’s account. Anyone who has sold a home to a buyer applying for a mortgage, only to see the process flounder knows how frustrating it can be. While cash buying isn’t a flawless method, it is typically less risky when things are not going the buyer’s way.
Selling to Cash Buyers: Individuals and Companies
Though most people buy a home through financing, it is not unheard of for an individual to offer to buy a home with cash. House flippers also buy with cash. They do so at a low price and then make renovations so they can sell for a profit. Also, real estate companies may buy homes with cash. These companies may keep the homes or sell them as rentals. Online companies, known as iBuyers, also purchase homes with cash. These companies can give a nearly instant cash offer and typically look for homes in good condition.
There are advantages to going the route of selling to cash buyers. This process is faster and less stressful than selling to a financing buyer. You eliminate many steps that can otherwise stretch out the closing of the home. If you are interested in selling your home, it is good to know that you have options outside the regular methods. Cash buyers can be a viable alternative to explore.