Cash home buyer share a few similarities. First, they do not need lender financing to buy your home. Second, they usually buy your house off-market, meaning you will get a far fewer contingencies. No need for appraisal to satisfy the demands of the back, nor will the buyer need to have their existing house sold before they can get a loan.
Because there is no need for a loan it reduces a lot of uncertainties on the seller’s end. On top of that, there is no need to spend time and money for stagings and showings. It also means you get to sell house fast, a lot faster than going the traditional route of selling a home.
What cash buyers will differ on are the purpose of their purchase, the types of houses they’re interested in, and the overall experience they offer to sellers.
- House flippers usually buy at a higher discount and plan to do improvements to a property before selling it to earn from it.
- Instant Buyers give immediate offers on houses online. They make use of web platforms and automated valuation models to provide sellers a streamlined experience.
- “Buy and hold” investors, as the term implies, hold onto the property for an extended time period, typically to rent it out.
The process of receiving an offer and closing will vary depending on what kind of investor you will sell your property to. Nonetheless, these are the main steps you can expect to go through:
Find A Cash Home Buyer
Here are some of the most common and effective ways to find a qualified cash home buyer:
Cash buyers are usually investors, and you will find a handful of them online. But you should practice due diligence in making sure you are dealing with a legitimate ‘we buy houses’ companies.
Work With A Wholesaler
You can also deal directly with a wholesaler who can match cash buyers with sellers. The wholesaler will value your house, estimate the rehab costs, and market it to their list of buyers.
Whatever method you choose, make sure to do enough research and ask for recommendations or references from other sellers.
Get An Offer And Review It
Once an investor or a cash buyer gives you an offer, how do you know you’re getting a fair price? Evaluating your cash offer can be tricky, especially since there is no one-size-fits-all formula.
But if your property is in good shape, you can look at comparable properties in your area and then deduct the commission of the agent and include whatever discount you think the benefits are worth. This is one way you can determine your home value.
It will also depend on the situation. Someone who is facing a foreclosure or who has a vacant house would value cash a lot more than someone who only wants a bigger home.
On the other hand, if the home is not in good shape, take the approximate value of the updated homes in your area, deduct what it would cost to get your home to that condition, subtract the commission and investor profit, and you will then get a fair price.
It is recommended that you ask the buyer the following questions:
- Do you plan depositing a considerable amount of earnest money?
- Do you have an excellent track track record of closing transactions?
- Are you using a standard contract? If not, is it okay with you if I have an attorney review the terms of the contract?
Any serious cash buyer will be willing to put down a decent initial deposit that is about 3 to 5 percent of the purchase price.
Preparation and Signing of the Purchase Contract
After accepting a cash offer, the following steps usually are very similar to a conventional home sale. The contract, which is typically prepared by the buyer, should include the purchase price, the deposit amount, and the closing date. You can have your attorney review the terms before signing and accepting it. Some cash buyers will require a home inspection, some will waive.
Determine Any Unique Requirements
Cash sales are fast and straightforward but sometimes, there are extenuating circumstances that can extend the process a little. For instance, if the house is in a homeowners association, the HOA may have a 30-day requirement to process the application of the buyer. Despite some possible delays, cash sales are still faster than a traditional home sale.
It is usual for cash sales to close in two weeks, a lot faster than conventional home sale. Aside from being quick, another benefit of cash offers is the flexible schedule. For instance, if you need to close before moving to your next home, the buyer can delay possession.
Closing will likely happen at a title company, and you’ll sign documents, like the deed, settlement statement and any property disclosures. The paperwork is either drafted by the seller’s attorney or the title company.