Do you need cash quickly, and the only solution is to sell your house right now? It comes as no surprise, given how the pandemic affected the economy.
Regardless of your reason, the option to sell a house to a cash buyer can get tedious. It’s especially bothersome when it’s your first time. If you aren’t careful enough, you might get a subpar deal and not even know about it.
Don’t panic yet.
With our help, you’ll learn more about selling your house to a cash buyer. That way, you’ll get the best deals while understanding the process. Read on and find out more:
How Does It Work?
Cash buyers will have a few shared traits: they don’t need lender financing to pay and usually buy your house off-market.
This means selling a house to a cash buyer can get you an offer without getting into some contingencies like bank appraisals and owners selling their house before getting loans. Without the loan, you have fewer unknown factors and skip the whole staging and showing process.
These people will present a different intent when buying your property. This also means a variation in the types of homes they take an interest in. This means you’re likely to have a different experience compared to other home sellers.
Depending on your investor, the offer and closing process will change. Regardless, you’re likely to go through these primary steps:
- Find a Cash Buyer
With over 40 million Americans moving at least once annually, you’re unlikely to find a shortage of willing cash buyers for your property. Here are two of the most common ways to find one:
In most cases, cash buyers are investors. This means that each market will have at least a handful of these people with a prominent online presence. If you plan to go this route, prepare yourself to spend more effort.
Work With Wholesalers
Wholesalers aim to match cash buyers with home sellers. Typically, these agencies or individuals will take a small cut. They will determine your property value, estimate the costs of rehabilitation, and market it using their buyers’ list.
Regardless of your method of finding cash buyers, do your homework. Look at their background and ask whether they can give references from other reputable sellers. Otherwise, move on.
- Get a Cash Offer
After an investor presents their cash offer, how do you determine whether it’s fair? The answer is that evaluating it is a tricky process. This means you won’t get a formula that would fit every situation.
Regardless, a good way to determine your property’s value is to look for comparable properties recently sold in your area. Ensure that these have similar sizes and levels of finish with your home. After that, subtract the expected commission and think of discounts you can throw in to sweeten the offer.
The situation will also play a huge factor in the amount you’ll accept. If you’re going through a foreclosure or have a vacant home, you’re likely to value cash more. It’s especially compared to people who only desire a bigger home.
But what if your property isn’t in its peak form? Calculating its appropriate price is to look at the average value of updated houses within your locale. After that, subtract the costs to transform your house to that condition and deduct other costs like commissions and investor profits.
You can also get a trustworthy agent to help you develop a competitive price for your home. If you want to get the most out of this process, order a home appraisal. This is an absolute must if you’re struggling with the best price.
- Evaluate Your Buyer
While you evaluate your investor’s cash offer, you must determine their reputability. Ask whether they’re planning to deposit a significant amount as a down payment. If this isn’t their first time, look at their track record and see whether they’re good at closing transactions.
As for the contract, ask whether they’ll use the standard one. If not, get a lawyer and let them review the contract terms. As always, ask them for permission before you do this.
Serious cash buyers are willing to give a sizable initial deposit. It must always be somewhere around 3% to 5% of their cash offer. If they go any lower, it might be a warning sign to stay away from them.
Also, ask for their proof of funds. This can come as simple bank statements or bank officer-signed letters. With this, you can confirm that your potential has the funds to close the transaction.
You might find professional home buyers suspicious. But before you jump into any assumptions, read more about the common misconceptions with these people here.
- Prepare and Sign the Purchase Contract
After you accept the offer, the good news is that the rest of the transaction is similar to typical home sales. The contract must have the buying price, the deposit amount, and the date of closing. You can either sign to accept or let a lawyer review its terms.
With the lack of lenders, you’re likely to sell the house faster. It’s because you skip the professional appraisal process and the time for the buyer’s loan to arrive.
- Close on the Sale
Selling your house to a cash buyer means closing the deal much faster. In most cases, these deals will conclude within two-weeks. It’s much quicker than its conventional counterpart since the average time is 45 days.
Also, cash closing is more flexible. Regardless, you won’t notice a lot of differences when you get to the actual closing. You’ll likely sign the same documents, like the deed and settlement statements. You can choose the party that will draft the paperwork.
Sell a House to a Cash Buyer Today!
These are the steps to sell a house to a cash buyer. Use these to ensure that your next transaction will progress smoothly while getting the best deals.
Of course, there are more things to consider when it comes to listing your home and screening buyers. To discover even more real estate tips and tricks, we invite you to keep on reading our other guides right here, right now!