There are a lot of homeowners that want to sell their properties as quickly as possible, and getting a cash offer on the house is the best-case scenario. People usually don’t want to spend time or energy getting ready to sell, which includes fixing things, making improvements, deep cleaning, decluttering, and staging the house to show buyers.
But if you try to sell your house in a “normal” way, you might be concerned that it’ll take too long to sell, that you won’t be able to find a good real estate agent, or that it’ll be quite expensive.
You can sell your house in a better way, which is great news! When you sell your home for cash, you’ll enjoy a lot of benefits over the traditional real estate marketplace, which include less stress, lower costs, and less time spent on the sale. Read on to learn about the benefits of selling your house for cash and why going the cash route could be the best informed decision for you.
Key Takeaways:
- Cash offers are attractive because they minimize the risk of the deal falling through as there isn’t the need for financing or mortgage approvals.
- Most of the time, cash buyers close deals much faster than the usual way of selling real estate.
- When you sell your home for cash, you typically don’t have to go through an appraisal, which is a standard phase in the mortgage process that can slow down or even stop the sale.
- Choosing a cash buyer can cut down on the costs of selling a home, like repairs, staging, closing costs, and agent fees. It can also cut down on the stress and time needed to get the house ready for a hot market.
Cash Offers
What Does It Mean to Get a Cash Offer on a House?
If someone makes you a cash offer on your home, they are willing to pay the full amount you’re asking for without needing to secure financing. If you have a buyer who can pay for your home right away, you can skip a few steps, which can save you both time and money.
Whether the purchaser uses a bank account or takes out a loan doesn’t matter to the owner; money is money either way. That’s why many people prefer quick, easy cash sales: they can avoid many contingencies that could put the buyer and seller at risk.
Compared to more traditional house sales, cash offers remove a lot of the hurdles that might get in the way of the buyer and seller achieving their goals. The buyer doesn’t have to go through the lengthy process of getting approved for a mortgage, and you don’t have to get your property inspected and appraised before the sale can be finalized. This has led to a rise in the popularity of cash offers.
Benefits of Accepting a Cash Offer On Your House
All cash offers come with pros and cons, though usually the pros outweigh the cons in most situations. Cash home sales are different from other types of home sales and have many perks, such as:
1. Appraisals Not Necessary
Many people prefer cash sales because they don’t have to worry about appraisals. Home appraisals are a necessary step for conventional mortgage lenders in determining a property’s worth and mitigating risk. Mortgage lenders may decide not to finance a home if the estimated value is low, which turns off most buyers.
When you sell something for cash, you don’t have to worry about getting it appraised. This means you won’t miss out on a sale because of how much your home is valued.
2. Fast Closing Process
There are a lot of people who want to move quickly, and an all-cash deal is a great way to do that. Even if you find a buyer, it takes 45 days to close on a conventional loan. The traditional home-buying procedure, including waiting for mortgage lenders, paperwork, and other steps, can take a considerable amount of time.
If you sell your home for cash, you can skip all of these steps and move on with your life right away instead of having to wait for the market to pick up.
3. Fewer Risks
You always run the danger of wasting time and having to find another prospective buyer if you rely on the traditional buying process, which means you’d have to start the process over from scratch. A house sale for cash is the safer alternative because of the speed and certainty of the process.
4. Hassle-Free Sale
Using the old-fashioned way to sell your home can cause a lot of stress.
You’re responsible for any fixes and upgrades, as well as cleaning and setting up the house for showings. Furthermore, you need to hire a real estate agent, oversee the home inspection and appraisal process, and keep the house clean while you are still living there. There is also the chance that the buyer will change their mind or that the mortgage company will not approve the loan.
When you sell your home for cash, you don’t have to wait around for the process to be completed. You can also move on to the next chapter more quickly.
5. Solving Challenges
Some people have problems in their lives that make them want to sell their home quickly. Once you get divorced, you may need to figure out how to divide the value of your home. Or, you may need to move quickly for a new job. You might need the money to pay off a bill or stop your house from going into foreclosure. No matter the reason, selling your home for cash can help with a lot of problems that people have.
6. Saves on Repair Costs
The need for repairs can be a significant obstacle for many people who are selling their properties. When people traditionally sell their homes, they have them inspected. The inspection report may reveal that several repairs need to be made, costing the seller money. Depending on how bad the problems are, you may have to lower the asking price considerably if you don’t fix them.
For cash sales, you can sell your home exactly as it is, without even making minimal repairs. The appeal of selling an ‘As-Is’ Property is that you don’t have to worry about costly repair expenses or trying to update the property to be on par with other comparable properties. Even better, you won’t even need to clean or prepare your property to attract buyers—tasks that may be a real pain when you have a family, pets, and a job.
‘as-is’ property
7. Inspections are not necessary.
It’s no secret that inspections and appraisals can be a real pain. The inspection report will reveal all the items that require repairs in your house. This can be a time-consuming and frustrating process, delaying the buying process. You can avoid these hassles with a fast cash sale, regardless of the condition of your home.
8. Simplified Process
Showing your house to potential buyers is an expensive and time-consuming ordeal that requires a lot of effort on your part.
Think about showings and open houses; it’s not easy to maintain your property in a show-ready state all the time. Do you have children, pets, or a full-time job? Keeping things in pristine condition could seem like an overwhelming task!
These stresses can be completely avoided by opting for a cash sale.
9. Stop Feeding the Money Pit
Has your home become a money pit for you? Are you sick and tired of having to spend all your hard-earned money on the rising cost of repairs?
When it comes to older homes, this is a common sentiment among homeowners. The good news is that taking a cash offer will stop you from wasting money.
10. Avoid Negotiations
Many traditional purchasers tend to negotiate pricing just to see how low you will go, paying attention to insignificant factors. In addition to taking time and causing worry, negotiating can also slow down the selling process.
There is no need to negotiate when someone offers cash for your home. Instead, someone will make you an offer on your house that you can accept right away. Cash buyers won’t be able to change their minds at the last minute, which would slow down the process of buying.
11. Less Paperwork
Traditional ways of selling require a lot of paperwork, which can be hard to understand and take a lot of time. Even a small error could have serious consequences down the road, so be sure to read and sign all of the documentation thoroughly.
If you work with a good cash buyer, they will take care of the paperwork, so you don’t have to. Note that not all cash home buyers offer this service, so you should check references and customer feedback to find out how they assist purchasers with the closing and documentation.
12. Avoid Commission Fees
There are a lot of costs that come with getting your house ready to sell. Real estate agents also charge a commission fee, which cuts into your profits. If someone buys your house with cash, you don’t have to give any money to a real estate agent.
Remember to look for hidden costs, as cash buyers can surprise you when you least expect it. There are no hidden service fees at HomeGo, so more of your money stays in your pocket.
13. Move Quickly
Do you have to move for work? Are you just ready to go? Don’t let a slow real estate market stop you from doing what you want (or need) to do.
Why keep your house on the market? If you want to move on with your life, just sell your house for cash.
14. No Risk of a Failed Sale
When it comes to home sales, did you realize that money problems are the number one reason they fall through?
That risk is removed with a cash buyer like HomeGo. Because HomeGo uses its own money to purchase properties, there is no risk of financing falling through, and you also won’t have to deal with inspection contingencies, which are known to enable buyers back out of transactions.
How Common Are Cash Offers on a House?
Contrary to popular belief, cash offers on houses are actually rather popular. In fact, in 2023 about 38% of real estate sales were cash sales.
In some parts of the United States, like North Carolina, Georgia, and Florida, cash offers are more common. As much as 62% of all sales in these states are cash. The likelihood of these sales happening in cash increases in the following situations:
- A buyer wants a place to live right away because they just sold their house.
- Investors in real estate want to rent it out or sell it as a flip.
- A seller has talked to an iBuyer.
- The buyer wants to get ahead in the market.
- A home needs pricey renovations or repairs.
- Their house needs work, but they want to sell it for a profit.
It is possible for cash offers to happen at any stage of a real estate transaction. Always keep in mind that pricing and marketing circumstances are just two of the many variables that might cause cash offers to change. For example, there may be more offers on houses in an expensive area, while residences priced below a certain threshold may be better suited to mortgage loans.
What Types of Homes Are More Likely to Be “Cash Only”?
Although every case is different, there are times when it’s more reasonable to accept only cash. Here are a few typical scenarios when cash sales might work best:
- Houses in foreclosure: When faced with a foreclosure, a homeowner must make difficult financial decisions that can affect their credit, such as whether to fight eviction, declare bankruptcy, or participate in a short sale. People can save themselves the hassle of an eviction and the potential damage to their credit by accepting a cash offer instead.
- Homeowners’ lives have changed: Getting a new job, getting married, going through a divorce, or losing a loved one are all major life events that might force people to move quickly. A stress-free cash sale lets a homeowner move sooner.
- Houses requiring repairs or renovations: Fixing structural damage or issues with the plumbing and electrical systems can lead to costly renovations and repairs.
A lot of people who get mortgages won’t buy a house that needs a lot of costly fixes. Selling homes for cash makes it easy to get rid of a fixer-upper, allowing you to close fast and with less hassle.
How Do You Determine the Value of Your Home?
Before selling your house for cash, it’s a good idea to get an estimate of what your home is worth. A comparative market analysis (CMA) tells you how much a home is worth by looking at similar homes that have recently sold in your area.
Although this is less common in cash sales unless the seller initiates it for pricing recommendations, hiring a professional appraiser can also provide a complete valuation. Online tools for home values can be useful as an initial check, but they should be used with guidance from professionals to fully understand the housing market and the specifics of the house.
Look for cash buyers who will give you a fair price and provide data about the purchase price.
How to Get a Cash Offer for Your House
There are multiple ways to get a cash offer on your home. A lot of different people and real estate companies offer cash for houses to either fix and sell in hopes to make a profit, or add to their rental portfolio.
Types of Cash Buyers and How to Find Them
1. “We Buy Houses for Cash” Companies: These companies buy homes that are in bad shape, fix them up, and then sell them on the open market. Not all of these companies provide an equally positive customer experience. It’s a good idea to look for good reviews, ask previous customers for recommendations, and make sure the business is accredited.
- Local “We Buy Houses for Cash” companies often post signs around town that say, “I’ll Buy Your House for Cash” and have a contact number. You can also search for “We buy Houses for Cash” companies near me. Or, you can contact HomeGo with track record of providing a professional experience where you pay no closing costs or commissions!
2. iBuyers: These online home buying companies do the same as the “We Buy Houses for Cash” companies; however, they use algorithms to make a cash offer on a house. It can be attractive to get a quick number on a screen as a potential offer, but those numbers rarely hold true. Many times iBuyers use a higher offer to get your attention and get you to agree to starting the process with them. Inevitably when they send someone out to look at your home in person, the price they’re willing to pay comes down quickly.
- Search for “iBuyer companies” online.
3. Home Trade-In Services: These companies will give you cash for your old home and usually let stay in it while you buy your new one, making the move between homes easier. While this can be a great convenience for the homeowner, it does come at a cost. There are various models used by these companies, but they still have to make money. Typically it costs around 6% of your home’s purchase price, plus another fee around 2% or 3%.
For example: On a $300,000 home, that comes out to around $25,000 or more and doesn’t include most closing costs. But for some, not having to worry as much about the timing of moving between homes is worth it.
Just keep in mind that homes that need a lot of repairs and updates likely won’t qualify.
4. Real estate investors: Investors buy houses to either fix and flip for a profit or convert them into rental properties. Whether it’s a company or an individual, these investors are usually experienced and know what it takes to get top market value from either selling or renting the property. Their offers often reflect the time and money it will take to do so.
- There are a lot of ways you can find real estate investors who’re eager to make a cash offer. These include real estate investment groups, online real estate platforms, real estate auctions, wholesalers, social media, word of mouth, and real estate agents.
Finding individual cash buyers and real estate investors can be difficult if you don’t have contacts in your local real estate market. Real estate agents, brokers, title companies, or other real estate professionals can sometimes help connect you with an investor.
By doing this, you can rest assured that the buyers you’re dealing with are legitimate and won’t take advantage of sellers who are struggling financially by offering significantly lower prices than the market value.
Do cash buyers pay closing costs?
Closing costs in a cash home transaction, while generally lower than those involving a mortgage, still include several fees and expenses. They can also be negotiated between the buyer and seller. Some cash home buyers, like HomeGo, will pay all closing costs for you. It’s something you need to consider as a part of any offer you receive. Here are the common closing costs you can expect:
- Title Insurance: This is very important to protect against possible problems that a title search may uncover. Title insurance, which is typically a part of the closing costs, provides legal protection for the buyer and seller.
- Legal Fees: Managing legal paperwork and making sure all regulations are followed can result in large expenses, which are usually included in closing costs. However, if you hire a real estate attorney to review the purchase contract or sit at the closing table with you, that’s a separate cost you’ll have to pay.
- Escrow Fees: These are paid to the escrow company, who’s tasked with keeping an eye on the money to make sure it gets handled right when the deal closes.
- Transfer Taxes: Transfer taxes are fees that are charged when the title of a home changes hands from the sale to the buyer. In some areas, they are automatically charged when the deal closes.
- Recording Fees: These fees are paid to the local government to record the new deed and other documents associated with the sale.
Check to see whether your cash buyer wants you to cover closing charges. Be aware that some cash buyers charge these service fees, so check first.
One major perk of selling with HomeGo is that we flat-out do not charge you for closing costs. This streamlines the process and ensures that there are no surprises.
How Much Do Cash Home Buyers Typically Pay?
Since cash buyers are bearing the costs, risks, and investment themselves, they usually pay a little less than the property’s top market value. According to a study released by the University of California, San Diego, in 2021, the average cash buyer pays 11% less than what someone would pay in a traditional sale. But getting top market value usually comes at a cost the the homeowner.
People normally only pay full market value for a home if it meets that standard. In most situations, that constitutes the homeowner making certain repairs and updates to the property, staging and taking professional pictures/videos, and hiring an agent and paying 3%-6% commission– all to attract a higher offer. Of course doing all of that comes with a cost and takes time. Sometimes all of these costs don’t increase the home’s value enough to end up creating a net positive return for the seller, especially if they’re inexperienced in this area. Time also equals money spent on additional months of mortgage payments, property taxes, insurance, and other costs of remaining in the home. So just because the purchase price is lower, doesn’t necessarily mean that less money is going into the pocket of the homeowner selling their home.
That lower cash price also means that the buyer purchases the house “as-is”, foregoing any formal home inspections. So the risk of any repairs or updates the home needs, known or unknown, fall from the seller to the buyer.
Cash Offers Help Both Sellers and Buyers
Cash offers are a win-win situation for both sides. Since cash purchases avoid much of the red tape involved with mortgage loan approvals, the entire process is faster and easier for sellers. This lessens the possibility of negotiations falling through because of funding issues. In return, sellers who are ready to close quickly may be more amenable to buyers who offer cash and are willing to negotiate better terms or pricing.
Reasons Why Buyers Buy Homes for Cash
It’s clear why taking a cash offer on a house is a good idea. Additionally, it’s easy to see why a homeowner might want a cash offer: It’s faster, easier, and there are fewer things that get in the way.
But why would someone want to buy a house with cash?
- Opportunity for Profit: Purchasing distressed or undervalued properties with cash allows investors to renovate and sell them at a higher price, potentially yielding significant profits. Successfully renovating and either selling or renting out a property can provide additional capital or equity that can be leveraged for future investment opportunities.
- Less Competition: Cash buyers often face less competition in the market, particularly for fixer-uppers that might not qualify for traditional financing due to their condition.
- Avoiding Interest Payments: By paying in cash, buyers can avoid the cost of interest associated with a mortgage. Over the life of a loan, interest can add a substantial amount to the total cost of the home. For investors looking to rent out properties, buying with cash can provide a higher return on investment (ROI) since there are no mortgage payments, resulting in more rental income being retained as profit.
- Negotiating Power: In a seller’s market, when there are few houses on the market and buyers are vying for them, a cash offer is usually the most appealing. The buyers who are ready to pay cash are better off than the buyers who want to go the traditional way and get a mortgage from a bank. Sellers are more likely to accept cash offers on as-is properties because they eliminate the risk of financing contingencies that could delay or derail the sale.
- Investment Diversification: For some, real estate is a way to diversify their investment portfolio. Owning property outright can be seen as a stable investment compared to stocks or other financial assets.
- Quick Transactions: Cash purchases can expedite the buying process, which is beneficial when acquiring properties that may require immediate attention or when dealing with motivated sellers who prefer a quick sale.
- Improved Neighborhoods: Investing in and renovating as-is properties can contribute to neighborhood revitalization, potentially increasing property values in the surrounding area.
Sell Your Home for Cash Today!
If you want to sell your house, HomeGo’s cash offer might be the best way to go. As you now know, cash sales can help you close quickly, cut down on stress, and keep costs low. When you work with us, we give you an offer the same day after a quick look at your house. You can move on quickly and without any trouble because we can close in as little as seven days.
Get in touch with HomeGo right away if you want to get a cash offer on a house today!
