Amid the Covid-19 pandemic, the US housing market had a huge surge, with about 6 million homes sold in 2021. Also, home prices were up by around 20% compared to 2020.
Even though we’re in a seller’s market, your home selling process can be time-consuming and overwhelming. Also, waiting for homebuyers to bid on your property can be nerve-wracking.
Accepting a cash offer for your home is beneficial and can streamline the selling process considerably. Although it’s a far better alternative to traditional home sales, you might not know much about cash deals.
Keep reading to know why you need to accept a cash offer on your home.
What Is a Cash Offer on a Home?
Starting with the basics, what is a cash offer on a home? And, how is a cash offer different from a traditional home sale?
You might imagine a potential home buyer arriving at the negotiating table with a briefcase full of cash. Though such a scenario can make a great movie scene, in reality, cash deals are not that dramatic.
A cash offer is a sale in which a home buyer pays the seller the home’s total cost without using financing like mortgage loans. When the buyer has enough cash to buy your home right away, you will not avoid many long and costly steps.
But, from a home seller’s perspective, it doesn’t matter where the money comes from – either a mortgage loan or own bank account. The result is the same: the buyer pays for the house.
The actual difference is avoiding many contingencies posing risks for the seller and buyer. That’s why most home sellers and buyers opt for cash offers on home sales.
Cash offers are faster, easier, and involve fewer hoops. At their core, all house sales lead to an exchange of cash in one way or another.
But, cash offers will remove many obstacles that the conventional home sale process has. That’s why cash offers are now growing in popularity.
Types of Homes Likely to Be Cash Only
Every property seller’s situation is unique. But there are various situations where a cash-only deal makes more sense.
Here are common types of homes that might be “cash only.”
Homes Risking Foreclosure
Homeowners facing foreclosure are often between a rock and a hard place. Due to their financial circumstances, they can’t make payments, and their options feel limited.
In some cases, they face tough decisions – bankruptcy, short sales, and evictions – that might ruin their credit making life harder. But, cash sales offer a way out.
By accepting a cash offer, you can avoid eviction, save your credit score, and move quickly to the next stage in your life.
Homeowners Experiencing Life Changes
When you experience a major life change like retirement, marriage, divorce, or a new job, you may need to move fast. All these life changes will lead to the need to sell your home quickly and stress-free.
A cash offer is your best solution here.
Home Requiring Repairs
Home repair costs may be too much for homeowners to handle at times. It may be a cracking foundation, roofing that needs replacing, a faulty electrical system, or leaky pipes.
Conventional home sales make it almost impossible to sell homes needing major repairs. Also, most lenders refuse to give loans for damaged properties.
Fortunately, you do not need to follow these rules. Most homeowners sell fixer-uppers to cash home buyers. That way, you can enjoy a faster sale process with less stress.
Advantages of a Cash Offer on Your Home
Cash offers on homes differ from traditional home sales in various ways. Let’s detail all of the advantages of accepting a cash offer on your home.
Here are a few:
You won’t deal with any lenders when you decide to sell for cash. The sale will take less time to close, up to two weeks. The mortgage lending process causes long delays in conventional home sales.
Most sales need mortgages to go through. But, the process can take up to 60 days leaving room for a lot to happen during that time.
A buyer’s financial situation might change between pre-approval and loan finalization. That can make the lender refuse to offer the loan making the deal crash.
Financial difficulties are the main causes of contingent offers falling through. But, in contrast, a cash offer is not contingent on mortgage financing.
You will reduce the risk of your sale falling through and save time on the sale process.
There is no need for appraisal in a cash deal. In many traditional home sales, the buyer requires a mortgage lender. The lender has to reduce their financial risk when accepting to finance the buying process.
Lenders must determine that the home they are financing is worth least the loan amount. They use an appraisal to determine the home’s value in many cases.
So, if the appraisal happens below, the mortgage lender might refuse to finance the home buying process. That is also a major cause of sales falling through.
But, cash sales take appraisal out of the sale process. That’s so because it doesn’t involve mortgage lenders, removing a major obstacle from the home selling process.
Cash offers tend to be stronger than sale offers that need traditional financing. Since multiple options are available, it makes more sense for sellers to pick buyers presenting the least risk. Often, those are cash buyers.
Most homeowners accept cash offers over those that need mortgage financing, even if the cash offer is lower. Sellers know that cash sales close faster, meaning they will receive their cash sooner.
You will not risk your deal falling through.
A traditional home selling process is stressful enough! You have to clean, repair, upgrade, and stage your home. You have to find an agent to deal with appraisal and inspections.
Also, don’t forget the stress of the uncertainty of the buyer backing out or losing financing. Finding a way to make the process enjoyable or less stressful is key to getting through it all.
With a cash offer, you will deal with fewer people, have few documents to sign, and less work overall. It’s a winning situation for you and the buyer.
You Don’t Need Marketing
Most sellers looking for cash buyers don’t bother with marketing their homes. Some places can help sell your home fast.
There are many options for you with regards to home buyers. You don’t need marketing for this process since buyers find sellers in such a market.
Of course, buyers do some research on their own, but the sellers often find buyers in an all-cash deal. That’s good news for individuals without technical skills.
Listings, advertisements, and correspondences are now through real estate sites. Do not think that puts you at a disadvantage at all.
You can maximize your cash offer even without marketing. So, do not settle for a lower price.
You Don’t Require Showings
After marketing, also throw out showings. You do not have to worry about staging your home before selling. You won’t spend hours taking perfect pictures and trying to hide things from strangers touring your home.
You won’t deal with the stress of putting these events together. Cash buyers are also not likely to attend house showings.
If a cash buyer needs to see your home, that won’t be a staging event. Some cash buyers will request a small showing to see the basics of the home, but you don’t have to show.
Bothe inspection and appraisal are no fun. Identifying all the wrong things within your home will also be incredibly stressful. You can lose money since repairs tend to be expensive.
Deciding on an all-cash offer will eliminate this hassle. Also, cash buyers usually expect homes to have flaws; hence you can skip on house repairs.
Better House Buyer Options
With a cash offer, you don’t need to only sell to buyers with a pre-approved mortgage. You can sell to investors or people in need of a second home.
A cash offer will give you flexibility and better house buyer options. You can also sell to investors or companies.
Consider selling to the highest bidder to get the most cash out of your home sale process.
No Realtor Fees or Commissions
True, your home selling process can be expensive. Also, it may feel overwhelming thinking about the fees associated with hiring a realtor and covering closing costs.
A cash offer will help you avoid such costs, including realtor fees and commissions. You can have more cash with you at the close of the sale without a realtor.
Eliminate Lending Issues
Dealing with buyers who use mortgages will make you run into financial barriers. The lender might pull out of the deal at any time.
Unfortunately, most people can’t afford to buy a house without financial assistance. So, homebuyers will likely drop out of a deal once the lender drops the deal on their end.
You will go back to square one after a lender drops out of the deal. But, when selling for cash, you won’t have to worry about any middleman affecting the deal.
You will sell your home and get the cash immediately with a cash deal.
Don’t Need Negotiation
Most cash offers don’t need much negotiation. Some deals don’t need any negotiation. Consider setting a solid price and make offers that meet or exceed it if you’re not much of a negotiator.
You won’t have to negotiate in such kind of a scenario. That is even great for home sellers without the help of real estate experts. In most cases, sellers have assistance from these individuals.
But, with a cash deal, that’s not usually the case. Though there are many negotiation strategies, most of us don’t have communication skills.
So, if you want to avoid arguments, a cash offer is your best option.
Home Buyers Can Work to Your Timeline
A buyer using financing is always contingent on the lender’s timelines for closing, but a cash buyer is not! Traditional closing takes up to 60-days, while an all-cash deal can take about 14 days to close.
You will also worry less during your cash deal closing period. There are low chances your all-cash deal will fall through at the last minute.
Most cash sales don’t need much paperwork. Most reputable cash buyers can handle the closing and paperwork for you.
And, because most cash buyers waive contingencies, you don’t have to review any reports. Before accepting an investor to handle your paperwork, do your due diligence on them and even consult a lawyer to review it before signing.
A Cash Offer Can Solve a Difficult Problem
You may want to split the equity in your home due to a divorce. Or, do you need to relocate for work? Maybe selling your home fast will help avert foreclosure or enable you to liquidate cash to settle a debt.
Whatever the reasons, a cash offer will help you get out of a sticky situation.
Accept a Cash Offer on Your Home
Home sellers prefer all-cash offers due to the quick sale process and fewer uncertainties. They even prefer a cash offer over higher offers involving conventional financing.
Accepting a cash offer will come with many advantages. Make the right decision for you and your family by accepting a cash offer on your home.
At Smith Liquidations, we will buy your house in its current condition. We have no commissions or fees involved, and you will also have no obligations whatsoever.
Contact us today to help you get out of your sticky situation.