Advantages of Accepting a Cash Offer on Your House
What Sellers Need to Know About Closing/What Sellers Should Expect at Closing
May 19, 2020
If you’re struggling to sell your house or simply want to get it done quickly and without fuss, accepting a cash offer may provide the perfect solution. A cash offer is a sale in which the buyer pays for a property without needing loans or financing. This enables both buyer and seller to skip many of the steps required when a mortgage company is involved, resulting in a much faster, smoother sale. They’re not uncommon, either; cash offers account for about 22% of single-family home and condo purchases in the US, according to a recent study by ATTOM data solutions.
Cash offers can be advantageous for both the buyer and the seller. They’re often stronger than offers from buyers who require financing, especially in a seller’s market. They aren’t restricted by any of the limits certain loans often require, providing access to a wider range of options. Cash buyers also save money by skipping out on fees and interest from loans, and the home they buy provides instant equity without the need to deal with mortgages. Buying a property with cash cuts out many of the stresses and potential problems a buyer can face.
Any home can be sold for a cash offer, but certain circumstances are more likely to make them the best option. For example, when a homeowner is facing foreclosure, a cash offer can provide a solution to what may seem like an impossible situation, preventing eviction and further damage to their credit score. Those undergoing major life events may want to consider a cash offer as well. Situations like divorce, illness or death in the family, or a new job can result in a need to get a house sold quickly, and listing it with an agency may take too long. Many homeowners with distressed properties choose to accept cash offers as well. Renovations can be costly and time-consuming, and cash buyers usually take properties as-is. Regardless of circumstances, cash offers can provide many benefits for any homeowner.
Less stress
Chances are you’ve got other problems on your plate besides just trying to sell your house. Accepting a cash offer can provide solutions to a number of different issues. If you’re facing foreclosure, selling for cash can mean relieving stress about getting the house sold quickly. If you’re dealing with divorce, getting a cash payment can make it easier to handle splitting the assets. Life comes with enough stress already – selling your house doesn’t have to add to it.
Close faster
Waiting for a house to sell can take ages. From the initial listing to the closing date, the average length of time it takes to sell a house is 55-70 days in the US. Accepting a cash offer speeds this process up considerably because you can potentially eliminate several steps. You can most likely avoid showings, inspections, and appraisals by going with a cash buyer. Cash buyers often take the house in as-is condition, which means no time wasted on repairs and renovations. In addition, these purchases don’t require mortgages. so you don’t have to wait on documentation to follow through or other potential setbacks.
Reduce risk
Once you’ve accepted an offer on your house, you still have to keep your fingers crossed that it doesn’t fall through. Any number of issues can arise while waiting for everything to be finalized. Fortunately, many of these uncertainties aren’t a problem with cash offers. They aren’t contingent on mortgage underwriting, so you reduce the risk of financial difficulties preventing the sale. There are usually no concerns about the condition of the house, so you don’t have to worry that an inspection will end with the buyer backing out. Overall, accepting a cash offer significantly reduces the risk of the offer falling through.
No fees
When you skip the real estate agency and sell to a cash buyer, you also get to skip paying the commission fee, which can be as high as 6% of your home’s sale price. You’ll also be able to avoid fees related to mortgages and lenders. Cash home purchases don’t require mortgages, because the buyer isn’t borrowing money, so in addition to saving money on fees, it also speeds up the process because you don’t have to wait for the mortgage to be underwritten.
Skip repairs
Whether your house is falling apart or just needs a little touch-up, doing repairs and renovations still costs time and money. Many home buyers just aren’t up to the challenge of dealing with a fixer-upper, and even outdated furnishings can cause a buyer to turn their nose up at a property. Most cash buyers will accept the house in as-is condition, meaning no cleanup, no repairs, and no updates.
Easier process
By accepting a cash offer, you can cut out many of the tedious steps involved with selling your house. There’s no need to deal with showings and waiting for offers. You can often forego inspections and appraisals because the buyer usually takes care of those. There are no fees and commissions, and many cash buyers will even cover most or all of the closing costs. There is even less paperwork involved, thanks to a more straightforward process with no mortgage lender involved.
