Nowadays, it is not hard to find “We buy houses for cash” companies. Even larger companies are joining in the business of buying houses for cash and reselling them. The competition has also made it favorable to sellers. With more competition, cash home buyers are also giving better offers to sellers. The question now is, if to sell your house for cash is the right move for you. Knowing its advantages and disadvantages will help you make the right decision.
Why is an all-cash offer better when selling a house?
Advantages of Selling A House For Cash
- Significantly Faster than the Traditional Way of Selling A House – It’s common knowledge that the conventional way of selling a house through an agent and the Multiple Listing Service do not guarantee that you get to sell your house. When your pricing is on point, you should get offers. However, it usually takes months to get the deal you wanted. Based on the data of Realtor.com, it takes 65 days for a house to get sold and it differs widely by location.
Then when you are under contract, it will take another 30 to 60 days, or even longer, and that is assuming you won’t be encountering any issues. Most escrows do close but there is a small percentage that can still fail. Considering all these, going the conventional way of selling a house definitely has drawbacks especially when you need money fast. There are situations where you have to sell your house quickly such as having a job in another town and you have to move. If you go with a cash house buyer, you can get an offer quickly. Companies like The Cincinnati Property Twins can give you an offer within 24 hours. On top of that, you can close in a matter of days, unlike standard sales that can take weeks to sort out everything.
- No need to do any repairs. One advice that has always been said when selling your home is to do fix-ups to maximize the value of your house. But when you have no cash-on-hand or you want to sell house fast, this advice may not be ideal and practical. Cash house buyers will buy your house as it is. Though you still need to disclose any known issues or damages, it will be up to them to do the necessary repairs. If your house needs major repairs and your circumstances make it hard or impossible for you to do them, then the option to sell house for cash is more favorable.
- Cash buyers won’t back out. A buyer changing their mind is often the reason a house sale fails. There might be a previously undetected issue with the house or they just simply decided not to purchase. Whatever the reason may be, it can be very frustrating and leave you in a difficult situation. Cash home buyers purchase your house for the purpose of reselling them. They would not change their mind in buying your house once they give you an offer.
Disadvantages of Selling A House for Cash
- Less Money – The speed and convenience of selling a house for cash comes at the price of lower cost. Expect to get 60 to 80 percent of your home’s market value. This is because these guys are in the business of buying houses to resell them. They are not going to stay in business for long if they buy your house at its market value and resell it. Also, they are buying your house as it is. If your house needs major repairs, this might be a better deal. Not having to do any repairs and without a real estate agent’s commission can offset the difference of the cost. In the end, you can still get the same, or even more money.
- More prone to scams – If you are dealing with a reputable company like the Cincinnati Property Twins, then this should not be a concern. But if you just find out about the company in the mail or an ad, ask for proof of funds letter from their bank. Also check if they are accredited.
While a cash offer for your house is likely to be lower than its market value, you cannot overlook how it’s faster and more convenient. You should also consider the costs of repair you are going to put into it if you go with the traditional way of selling your house. Ultimately, it’s up to what you prioritize more and your situation.