When it comes to selling a home, time and labor are two major concerns for home sellers. From staging to cleaning, the preparation for a home sale can be time-consuming and labor-intensive. The process often weighs on people’s minds and creates unnecessary anxiety about the process. Home sellers often have thoughts of, “What if I can’t find a realtor? What if the sale takes too long? What if the finances aren’t right?”
Fortunately, there is an easier way to sell your home that takes much of the stress out of the process. Accepting a cash offer on a home has many advantages compared to a traditional sale, such as speed, reduced cost, timing, and avoided stress.
So, why is a cash offer better? Read our article on the benefits of selling your home for cash.
What Is A Cash Offer?
Before deciding to sell your home for cash, you need to understand what a cash offer is and how it is different from a conventional home sale.
A cash offer is an all-cash bid on a home, meaning that a homebuyer will purchase a property without a mortgage loan or other financing. This allows for the home to be purchased outright and the long, expensive steps of a home sale are avoided.
As a home seller, it does not matter if the money comes from a loan or cash. It is all the same. Someone has purchased your home and paid for it. However, the process of cash selling a home avoids the numerous contingencies of the sale for the buyer and seller. This is why so many people choose cash offers. They are faster, easier, and minimize headaches.
During a cash offer process, there is no requirement for the property to be appraised (unlike a conventional home sale). The home buyer does not need to be approved for a mortgage loan, there is no need for an appraisal to determine the value of a home.
At the end of the day, all home sales are a transaction where a home seller makes money and a home buyer spends money. The cash offer route greatly reduces the steps in the process and makes the sale easier for all parties involved by eliminating obstacles. For this reason, cash offers are becoming more common.
Types of Homes More Commonly Cash-Offered
The sale of a home is different from house to house. There are no two situations that are identical. However, there are certain scenarios that make cash-only offers more ideal. Here are a few common home types that often attract cash-only offers.
Risk of Foreclosure
Homeowners that are at risk of foreclosure are in a difficult situation. They have found themselves in financial trouble and cannot make payments on their home, which puts them in a tough predicament. Decisions on short sales, eviction, bankruptcy, and more must be made and can have long-lasting effects.
A cash offer is one way out of this tough situation. Accepting a cash offer will save an individual’s credit, avoid eviction, and help transition them to the next phase of their life.
Homeowner Life Changes
Marriage, divorce, retirement, career changes, family deaths, and illness are all facts of life. When these life events occur, an individual will often need to sell their home quickly.
They could be retiring and need to downsize quickly. A family member may be ill on the other side of the country, and they need closer care. Relationships don’t work out and a divorce forces a quick home sale.
Life changes happen and the need to sell a home quickly can occur. A cash sale is one solution to these problems.
Home Repairs Required
Cracked foundation, leaking roof, burst pipes, and outdated electrical work are all expensive home repairs that can set a property owner back tens of thousands of dollars. It is expensive to keep a property in its best condition and sometimes work gets away from an owner.
Conventional home sales make it difficult to sell a home that requires major home repairs. Lenders refuse to issue loans for properties that require excessive work. There is hope though! Cash buyers do not use loans, so they are able to purchase homes even in the worst condition. For this reason, many homeowners sell their “fixer-uppers” to cash buyers.
Cash Buying Incentives
As we discussed, the advantages of cash buying include the speed of the process, ease of sale, and fewer obstacles to overcome. But why would a buyer want to pay cash for a house?
Negotiating Leverage
Most cash offers are strong offers, especially in a seller’s market. When buyers compete for limited homes, a cash offer holds an advantage over buyers who must seek financing.
A second advantage is that many lenders prefer to use cash buyers. A lender may have a portfolio of real-estate-owned properties (REO) and foreclosed homes. Cash offers often win in these scenarios where there are multiple bids.
More Properties
Money Savings
Buying with cash? This can save thousands of dollars. Conventional home sales involve closing costs such as processing fees, credit checks, appraisals, documentation fees, and loan fees. Cash sales don’t only reduce the costs for the seller but also the buyer. With no loan involved in the process, the homebuyer saves money on the interest that would be paid with a loan.
Cash Equals Equity
When a home is sold for cash, that is instant equity for the homeseller. This improves financial security when there are financial issues.
Quick & Painless
Cash sales close much faster than a conventional home sale. There is no waiting for underwriting, credit score approvals, or appraisal processes that have to be dealt with. It is a simple, straightforward process.
Benefits of Cash Offers
Traditional home sales and cash offers are different in multiple ways. Here are a few differences.
1) No Appraisal
There is no appraisal process for cash sales. A traditional sale process requires a buyer to work with a mortgage lender. Lenders try to reduce their financial risk by determining if the value of a home they are financing is worth the loan amount. Low appraisals can cause a sale process to slow down or fail entirely.
A cash offer takes the entire appraisal requirement out of the process. With no lender involved, there is no need for the appraisal. This greatly speeds up the sale.
2) Closing Speed
From start to finish, a cash sale is faster than a traditional home sale. Once again, the mortgage lending process is the culprit.
The underwriting process can take anywhere from 30 to 60 days, and big changes can happen during that time. Financial situations change and mortgage lenders can refuse to issue a loan. This causes a deal to fall through.
Cash offers are not reliant on underwriting. This drastically improves the chances of a sale being finalized and the speed it takes to complete.
3) Minimize Risk
From a home seller’s perspective, it makes the most sense to choose the least risky option. Cash offers are usually the safer option compared to traditional financing. The seller knows that a deal will close faster (with more certainty), which means the money will be in their bank faster. Removing the whole financing process, the risk of a deal falling through decreases.
4) Less Stress
Traditional home selling requires cleaning, staging, repairing, and upgrades. Then, you need to find an agent that will handle the appraisal and inspection while you keep your house spotless for open houses and showings. These are just a few things you need to worry about, not even mentioning the whole financing issues or how long a sale will take.
There are numerous reasons why a seller would want to sell quickly, one of which being the ease of sale. No one wants a drawn-out process that is constantly looming over them. Quick home sales reduce the stress on the home seller.
5) Unplanned Life Changes
No one goes into a marriage expecting a divorce, but they do happen. This is just one example of an unexpected life change that may require a quick home sale. Work relocation, foreclosure avoidance, and cash to pay debts are all life changes that can be helped through quick cash from a cash offer.
It does not matter your reason for accepting a cash offer. It is a helpful solution to get you out of life’s difficult situations.
6) No Need For Repairs
Traditional home sales bring to light the repairs a home needs. The home inspection will uncover the many needs a home has, which will affect the selling price. A homeowner can either adjust their asking price or fix the problems.
When you cash sell, you sell the house as-is. You will save money on the repairs and upgrades a traditional home sale forces on you. Additionally, there is no need to clean your home or stage it for viewings.
7) Marketing, Staging, Showing
It is difficult to find potential buyers for a home. It requires time and effort to keep your home presentable for showings and to find people to view your home. Your home needs to constantly be in a condition for people to walk through and inspect the rooms. Do you have kids? Full-time job? Pets? Good luck keeping your home in tip-top shape!
Cash sales do not require a home to be immaculate. There is no need to market or show your home.
8) Quickly Move
Are you moving for work? Marriage not working out? Want to relocate the family? If you plan on moving fast, you will be at the mercy of the market. There is no need to wait around to sell your home. Accept a cash offer, pack, and move.
9) Inspections & Appraisals
No one has ever said, “Wow, the inspection and appraisal process is so fun!” This process uncovers all of the things wrong with your home, which only increases the stress of the home sale.
A cash sale avoids the headaches caused by inspections and appraisals. A cash buyer expects your home to have “issues,” but this does not deter them. You can avoid the expensive repairs that can slow down or halt a traditional sale.
10) Paperwork, Paperwork, Paperwork
With the traditional sale of a home comes the piles of paperwork that must be read and signed. The whole process of reading, initialing, and signing countless forms can be overwhelming and small mistakes can cost you BIG.
A good cash buyer will take care of the paperwork and closing forms. Not every cash buyer offers this service, so make sure you do your homework by reading reviews and references on the buyer you are working with.
Finding A Cash Buyer
Now that you understand the benefits of using a cash buyer, you need to know how to find them. Here are a few types of cash buyers you can find:
- Real Estate Investors are cash buyers who buy, improve, and sell homes. A common term is “fix and flip.” They sometimes hold onto properties and use them as rental properties.
- Homeowners who have recently sold a home and are looking to use the money to purchase additional homes.
- Affluent buyers who have money that are looking to invest in real estate.
- Retired buyers that use their savings to invest in real estate properties.
If you are considering selling your home, a cash offer is a great solution. As you have read, cash offers offer numerous benefits from faster cash in your hands and ease of transaction.
If you’re ready to sell your home and take advantage of a cash sale, contact 3Rivers Property Group today! We help Pittsburgh area homeowners by providing simple, fast solutions for their home selling problems. We understand that selling your house can be a difficult and stressful experience. Our goal is to take some of that burden off your back.
