Many homeowners want to sell their homes quickly. They don’t often want to spend time or effort preparing to sell, which includes completing repairs, handling upgrades and staging and cleaning the house to show it to buyers.
At the same time, you might be worried the sale will take too long, you won’t be able to find a quality real estate agent or the costs will be high if you try to sell your home the traditional way.
The good news is there’s a better way to sell your home! Cash offers can help you sell your home quickly, providing many benefits over a traditional market, such as reduced sale time, lower costs and little stress. Below, you’ll discover why a cash option could be the best choice for you and the advantages of selling your home for cash.
What Is a Cash Offer on a House?
A cash offer on your home means the buyer offers you the amount of money you’ve listed your home for in cash rather than using financing methods. Having a buyer with the money to purchase your home outright allows you to avoid several time-consuming and expensive steps that can leave your home on the market longer than you want.
From the owner’s perspective, where the buyer’s money comes from is inconsequential, whether from a financed loan or their bank account. The result is still the same. The difference is the ability to avoid the numerous contingencies that can pose risks to the buyer and seller, which is why many people prefer quick, simple cash sales.
Cash offers remove many hurdles that conventional home sales place between the buyers, seller and their shared goals. You don’t have to wait for the buyer to approve their mortgage loan, and you don’t need an appraisal. Cash offers are growing more popular as a result.
How Common Are Cash Offers?
Many believe cash offers on homes aren’t very popular, but this couldn’t be further from the truth. In reality, cash home sales occur in 22% to 24% of the market for condo and single-family home sales.
Cash offers are most prevalent in certain parts of the United States, including North Carolina, Georgia and Florida. These states see as high as 35.5% for cash sales overall. Some scenarios make these cash sales more common, including:
- A buyer has just sold their home and needs a place to live immediately.
- Real estate investors want to invest in the property.
- The seller has contacted an iBuyer.
- A buyer wants a competitive edge in the market.
- A property needs expensive repairs or renovations.
- Someone wants to sell their home for a fix and flip.
Cash offers can occur at any time during any point in a transaction. Remember that cash offers can fluctuate due to various factors, such as changing prices and marketing conditions. For example, a more expensive home may be more likely to have cash offers, while homes under a specific price point may be better suited to mortgage loans.
What Kind of Homes Are More Likely to Be “Cash Only”?
While everyone’s scenario is unique, some situations just make sense for a cash-only sale. Some of the most common situations that might be best for cash sales include:
- Homes facing foreclosure: There are tough decisions a person has to make during a foreclosure, whether it’s confronting eviction, bankruptcy or short sales that can impact their credit. A cash offer is a way out that helps people avoid ruining their credit and dealing with an eviction.
- Homeowners with life changes: Many people experience significant life changes, such as getting a new job, going through a divorce, getting married or having a death in the family, that require a quick move. A cash sale helps a person sell their home quickly without stress, allowing them to move sooner.
- Homes needing renovations or repairs: Repairs and renovations can be expensive, especially for structural damage or faulty plumbing and electrical. Many buyers financing through a mortgage won’t purchase a home that needs expensive repairs. Selling for cash allows you to get rid of a house that needs to be fixed up, so you can sell and close quickly with reduced stress.
Incentives for Buyers to Pay Cash
It’s not hard to see the benefits of accepting a cash offer on a house. It’s also not difficult to understand why a home seller might prefer a cash deal: It’s quicker, easier, and with fewer obstacles to maneuver.
But why would a buyer prefer to pay cash for a house?
In most cases, a cash offer is a more substantial one, especially in a seller’s market where a limited number of homes are for sale and buyers are competing. Buyers willing to pay in cash have more of an advantage than those who want to go through the traditional route and obtain a mortgage through a bank.
Along with the advantage at the negotiating table, some lenders prefer cash buyers, too. For instance, a lender may hold foreclosed homes or real-estate-owned properties in their portfolio. Often, the cash offer will win out in the case of multiple bids.
There are more home options for buyers who pay with cash versus those who want to take out a mortgage. Homebuyers who use U.S. Department of Agriculture or Federal Housing Administration (FHA) loans to buy a house are usually restricted to certain types of properties, including homes in certain places or particular conditions. These restrictions don’t bind cash buyers.
Cash Sales Save Money
Another advantage of buying with cash? Saving money. Selling a home traditionally includes numerous costs, such as appraisal costs, processing fees, loan fees and credit checks. Taking cash offers helps eliminate these costs, which can help sellers and buyers in numerous circumstances.
Cash buyers also pay less over time. They’re not using a loan to buy the home, so they don’t have to worry about paying interest. Over the years, that interest can add tens of thousands of dollars to the price of a home.
Cash Sales Provide Equity
In addition, cash buyers have instant equity in the home they buy. That offers a sense of security in case a financial issue arises. The equity already exists, so not having a mortgage means you don’t have to worry about the changing market.
Faster and Less Stressful
Finally, a cash sale closes quickly and causes less stress. There’s no waiting for the underwriting process, which can take weeks. There’s no anxiety over a less-than-great credit score, and there’s no waiting on tenterhooks for the results of a home appraisal.
Given all these benefits, it’s no surprise that many buyers choose to pay in cash.
Benefits of Selling a House for Cash
Cash home sales differ from traditional home sales and offer various benefits, such as:
1. No Need for an Appraisal
Many people choose cash sales because they don’t have to worry about an appraisal. Mortgage lenders require traditional buyers to go through the appraisal process to reduce risk, helping determine the home’s value. A low appraisal value can make the mortgage lender decide not to provide financing for the home, which turns away most buyers.
The benefit of a cash sale is it takes the appraisal out of the process. You don’t have to worry about losing out on a sale due to your home’s appraisal value.
2. Quick Closing
Many people want to move quickly, and a cash sale takes far less time than the traditional selling process. Waiting on mortgage lenders can take time on top of the paperwork and other aspects of purchasing a home through the conventional process.
You can skip all these steps by selling your home for cash, allowing you to close quickly and move forward instead of waiting on the slow market.
3. Fewer Risks
Relying on the traditional buying process always has the risk that the deal can fall through, causing you to waste time and forcing you to look for another interested buyer, only for you to restart the process from the beginning. When you sell your house for cash, you can sell quickly, making it the safer option.
4. Reduced Stress
There’s a lot of stress associated with selling your home through the traditional process.
You have to handle any upgrades and repairs, and you also have to clean and stage the place for viewings. You also have to find a real estate agent, manage the inspection and appraisal process and keep your house spotless, even if you’re still living in it. On top of everything else, you have to worry about the potential chance the buyer will change their mind or the mortgage lender won’t finance the loan.
If you don’t want to draw out the selling process or just want to sell fast so you can move sooner, selling your home for cash can significantly reduce your stress and the amount of overhead you have that’s associated with selling a property.
5. Solves Challenges
Some people experience challenges in life that increase the need for a fast home sale. Maybe you have to find a way to split your home’s equity after a divorce, or you have to move soon for a new job. Perhaps you’re getting close to foreclosure or need the cash to pay off a debt. Regardless of the reason, selling your home for cash can help solve many challenges homeowners experience.
6. Saves on Repair Costs
Repairs can be a significant barrier for many people selling on the market. An inspection can bring to light the need for many necessary repairs, which is money out of the seller’s pocket. If you don’t make the repairs, you’ll have to significantly lower your asking price depending on the extent of the problems.
Selling your home for cash allows you to sell it as-is, regardless of its condition. You won’t have to worry about spending money on repairs or renovations that can cause you to lose more money than you gain through a traditional sale. You won’t even have to stage or clean your home to present it to potential buyers, which can be challenging if you have a job, pets or children around the house.
7. Eliminates Inspection Needs
There’s no doubt that the appraisal and inspection process can be stressful. You have to learn about all the things that need repairs in your home, and it can waste a lot of time and delay the buying process. Selling for cash allows you to avoid these processes, even if your home has flaws.
8. Skip the Marketing and Showings
Finding potential buyers is a lot of work, and showing your home in the best light is both time-consuming and expensive.
Consider open houses and (especially) showings; keeping your home in walk-through-ready condition at all times is difficult. Got a full-time job, kids, or pets? Maintaining a spotless state may feel next to impossible!
With a cash sale, you don’t have to market or show your home.
9. Stop Feeding the Money Pit
Has your house turned into a money pit? Are you tired of sinking your hard-earned paycheck into repair after repair?
Many homeowners feel this way, especially those with older houses. The good news is, you can stop wasting money by accepting a cash offer.
10. Avoids Negotiations
Many traditional buyers want to negotiate over prices to see how low you’ll go, talking about minor details. The negotiation process can be stressful and time-consuming, further delaying the selling process.
With a cash offer for your house, you don’t have to worry about the negotiation process. Instead, you’ll receive a tight offer for your home you can accept then and there. You don’t have to worry about a cash buyer changing their offer last minute and delaying the buying process.
11. Reduce Paperwork
A lot of paperwork is involved in the traditional selling process, which can be confusing and time-consuming. The amount of paperwork you must read carefully and sign in the right places can be overwhelming, and even the slightest mistake can cost you in the future.
Working with a reputable cash buyer reduces the need to handle the paperwork since they’re handling it for you. Keep in mind that not all cash homebuyers have this service, so you’ll want to look at references and reviews to determine how they help buyers handle the paperwork and closing process.
12. Saves on Commission Fees
On top of all the other costs it takes to prepare your home for sale on the market, real estate agents also require that you pay a commission fee, eating into your profits. When you sell to a cash buyer, you don’t have to worry about handing over any money to a real estate agent.
Remember to look for hidden fees because cash buyers can spring them on you when you least expect it. At HomeGo, we never charge you fees, allowing your money to stay in your pocket.
13. Move Quickly
Do you need to move for your job? Looking to invest your money? Are you simply ready to go? Don’t let a sluggish market thwart your plans.
Why wait around for your home to sell? Just sell your home for cash, move out, and move on with your life.
14. Eliminate the Risk of a Failed Sale
Speaking of derailed sales, did you know that financial issues are the main cause of home sales falling through?
A cash buyer like HomeGo eliminates that risk. Not only can you avoid inspection contingencies — notorious for letting buyers back out of sales — there’s no risk of financing falling through because HomeGo uses its own funds to buy homes.
Why Is an All-Cash Offer Better?
Sellers love all-cash offers for several reasons, but for most, it all boils down to a quicker process with fewer uncertainties. Many home sellers may even choose a cash offer over a higher offer that involves conventional or FHA loan financing.
Why? Because a cash offer that includes proof of funds is simply more likely to close, take less time and involve fewer obstacles.
Let’s look at a few potential stumbling blocks that plague many conventional home sales, starting with the appraisal. Most lenders require the home in question to undergo appraisal before closing. If the appraisal value comes in under the loan amount, the lender can cancel the loan unless:
- The seller agrees to lower the price, or
- The buyer is willing and able to increase the down payment
Where do appraisal values come from? Usually, an appraiser finds three to six similar properties, known as comparable sales. The appraiser then analyzes the value of these properties, comparing them to the home in question.
If your home has been updated, the appraiser may adjust the value upward. If your home doesn’t have as many features as comparable sales, the appraiser may adjust your home’s value downward.
The appraisal process can be nerve-racking for buyers and sellers, especially since a low appraisal can tank a deal. This means starting the selling procedure all over again for the home seller.
Rather than go through this stressful, uncertain process, home sellers may choose to embrace one of the many benefits of accepting a cash offer on a house. An all-cash offer completely removes the uncertainty of the appraisal process from the home-selling equation.
Unfortunately, the appraisal isn’t the only piece of the home-selling process that causes trouble. Even when a home makes it through the appraisal gauntlet, contingencies may throw a wrench into buyers’ best-laid plans.
For example, a potential buyer’s qualifications may not hold up under more intense scrutiny. Problems with financing may arise from matters as simple as a buyer changing jobs and moving to a different occupational field within the past couple of years.
Or maybe the buyer applied for a car loan or experienced identity theft during the home purchasing period.
It just takes one incident for a buyer to be disqualified, but home sellers considering a cash offer don’t have to worry about any of these common issues.
Sell Your House for Cash Today
If you’re considering selling your home, a cash offer from HomeGo can be the best option. As you’ve learned above, cash sales can help your close fast, reduce stress and limit costs. When you work with us, we conduct a short walk-through of your home and give you an offer the same day. We can close in as little as seven days, allowing you to move on quickly and without hassle.
If you’re ready to explore the advantages of a cash sale, contact HomeGo to learn more today.