1. No Appraisal
With a cash sale, no appraisal is necessary. In most traditional sales, the buyer works with a mortgage lender. In order to reduce their financial risk (in case the home buyer forecloses in the future) the lender needs to determine that the house they’re being asked to finance is worth at least the amount of the loan.
In most cases, an appraisal is used to determine the home’s value. If an appraisal comes in low, the mortgage lender may decide they’re not willing to finance the home sale. This is a major cause of home sales falling through.
A cash sale takes the appraisal out of the process. Because there’s no mortgage lender involved, no one requires an appraisal… removing a huge obstacle from the home selling process.
2. Fast Closing
Another difference between cash and traditional sales? Cash sales take less time to close, from start to finish. Again, the mortgage lending process is usually to blame.
Most sales require a mortgage to be underwritten. This lengthy process takes from 30 to 60 days, and a lot can happen during that time. If the buyer’s financial situation changes between pre-approval and loan finalization, the mortgage lender may refuse to offer a loan and the deal may crash and burn. In fact, financial difficulties are the major culprit when it comes to contingent offers falling through.
In contrast, a cash sale isn’t contingent on mortgage underwriting. That means home sellers both reduce their risk of a deal falling through and save time on the sale process.
3. Less Risky
Cash offers tend to be stronger than offers using traditional financing. When presented with multiple options, it just makes sense for sellers to pick the buyer that presents the least risk. Usually, that’s the cash buyer. Often, home sellers choose a cash offer over an offer that will be financed with a mortgage, even is the cash offer is lower.
The seller knows that the deal with close faster, and that means they’ll get paid sooner. When you take the financing out of the picture, there’s less risk of the deal falling through.
4. Reduce Stress
Selling a house the traditional way is stressful. You have to clean, stage, repair, and upgrade. You must find an effective agent, deal with the appraisal and inspection, and keep your home spotless through showings and open houses. And let’s not forget the million and one other things to worry about; will the buyer back out or lose financing? How long will it take to sell?
While there are many reasons you may want (or need) to sell quickly, maybe you simply don’t want to draw out the process. Either way, a quick home sale reduces some of the stress typically associated with selling a home.
5. Solve a Difficult Problem
Do you need to split the equity in your home in a divorce? Do you have to relocate for work sooner than expected? Maybe a fast home sale would avert foreclosure, or allow you to liquidate cash to pay down debt.
Whatever the reason, accepting a cash offer on your house can help you out of a sticky situation.
6. Save on Repairs
In a traditional home sale, the inspection brings attention to necessary repairs. In most cases, the home seller must either pay to fix problems or lower the home’s asking price accordingly.
In a cash sale, you simply sell as-is. You’ll save money on repairs and upgrades… especially given that most don’t even result in a full return on investment. Best of all, you don’t even need to clean or stage.
7. 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.
8. 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.
9. Move Quickly
Do you need to move for your job? Are you getting divorced? 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.
10. Pass on the Inspection
Let’s face it: The inspection and appraisal process is no fun. Discovering all the things “wrong” with your home can be incredibly stressful.
A cash sale lets you avoid this hassle. Cash buyers expect your home to have flaws, allowing you to skip expensive repairs that can slow — or derail — a traditional sale.
11. 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.
12. Avoid the Negotiating Table
Do you enjoy haggling over prices? Find it fun to go back and forth over nit-picky details? Many people find negotiating stressful and unpleasant.
Good news: A cash offer lets you avoid the negotiations completely. Instead, you’ll receive a firm offer. You can accept on the spot and be done.
13. Say No to Piles of Paperwork
Paperwork is yet another not-so-fun home selling activity. The sheer amount of forms to read, initial, and sign can feel overwhelming, and even small mistakes can cost you.
However, a reputable cash buyer will handle the closing and paperwork process for you.
Not all offer this service, though. If you’re working with a cash buyer, be sure to check reviews and references to see how they’ve helped other buyers.
14. Save on Commission Fees
Did you know the average real estate agent fee takes up to 6 percent of your home’s sale price? Selling a house to a cash buyer means you skip the Realtor and save the money.
Just be sure to check for hidden fees, as some cash buyers may spring them on you. Fortunately, HomeGo never charges fees, so more money stays in your pocket.
Why is an All-Cash Offer Better?
Sellers love all-cash offers for a number of reasons, but for most, it all boils down to a quicker process that contains 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 so 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 the comparable sales, the appraiser may adjust your home’s value downward.
The appraisal process can be nerve-racking for buyer and seller alike, especially given that a low appraisal can tank a deal. For the home seller, this means starting the selling procedure all over again.
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.