If you want to sell a house, one of the first things you should decide on is whether to sell it to a cash buyer or a traditional house buyer. There is no straight answer to the question, which is better, a cash offer or a traditional home sale. If you’re wondering, ‘who should buy my home?’ It depends on your situation. Both have their own sets of pros and cons selling a house to a cash buyer. Read on to learn more:
Cash House Buyer
Buyers with an all-cash offer to buy your house are usually investors. They purchase properties, repair them, and either sell them again on the market or rent it out. They also have enough funding so there is no lending cash buyer company involved. With a lender out of the picture, you are able to sell your house fast. Usually, these buyers can close within 1 to 3 weeks, making it ideal for anyone who needs to sell their home quickly.
The cash buyer is usually an expert in real estate so there is no need for a realtor to represent them. You, as the seller, are not represented as well by a real estate agent, which means the total amount of money you’ll get won’t be deducted by agent commissions. Moreover, you can also save money with the closing costs because most of the cash house buyers will pay them for you. However, you cannot expect to get a top-dollar offer for your house. Nonetheless, if your house needs a lot of repairs and you have to move quickly, going for a cash buyer is still the best route to go. You’ll save lots of time and money.
Traditional House Buyer
The conventional home sale usually needs some form of financing, typically from a bank, to provide a loan to the buyer so they can afford to buy your house. Because the bank is taking a risk by lending the money to the home buyer, before the loan will be approved, there will be appraisals, strict inspections, and a survey. This is the main reason why a traditional home sale takes a lot longer than a cash offer.
Another difference between selling a home to a cash buyer and a traditional home sale is that with the latter there’s a realtor involved. Traditional home buyers aren’t real estate experts so they’d hire a realtor to represent them. This also means a fee will be charged. Usually, they’ll charge a 3 percent commission, whether they are the buyer’s agent or the listing agent representing the home seller. On top of that, another 3 percent commission must be paid for a listing agent to market the property on the MLS for exposure. That’s a 6 percent chunk off your net earnings. You’ll also need to offer a concession to the sales prices for repairs. While the traditional cash buyers can get you a higher offer than a cash sale, you also have to keep in mind the commission fees and the concession cost.
Now that you know the costs and time involved, now you can decide who is better for you a cash buyer or a traditional buyer for selling your home.