Remember, a cash offer doesn’t mean you’ll get a kiddie pool full of cash to roll around in. Unless you own your home outright, most of that money is going to the bank to pay off your mortgage. Another chunk will go to buying a new home. So, “kiddie pool full of cash” is not a benefit of cash offer over a financed offer.
The number one benefit of accepting a cash buyer is speed. Even preapproved home buyers still have to get an official mortgage approval, then go through underwriting, in a process that can take up to 60 days. Cash transactions, on the other hand, could take as little as two weeks. There are far fewer hurdles and less time spent at the negotiation table, allowing you to sell your house fast.
According to the
Association of Realtors, just 5% of sales were terminated in the last three months as of
October 2021. That’s not very common, but the same report shows that 24% of settlements were
delayed, with 21% of those reporting appraisal issues.
With a cash offer, you won’t have to worry about contingencies like inspection or appraisal killing the deal. Lenders want to protect their investment and they’ll do their due diligence. With a verified cash buyer, you won’t have to worry about the money, giving you greater confidence that the deal will go through on schedule.
Speaking of contingencies, cash buyers often waive them. It’s the lenders that want to make sure a buyer can afford a home and they’re paying what the home’s worth. Still, remember that every situation is unique — some cash buyers may keep the contingencies to protect their investment. Additionally, a home appraisal can sometimes be a source of stress for sellers since it might find your home isn’t worth what you thought. An appraisal that doesn’t match the sale price could kill a deal and force you to lower your price. If a cash buyer waives this process, you won’t have to worry about what your home is “actually” worth.
Speaking of stress, selling to a cash buyer may reduce your stress. Selling the traditional way requires cleaning, staging, repairing, and upgrading your home. You might have to hire a real estate agent and keep your home clean through showings and open houses. It can be a time-consuming, expensive, and very stressful process. Cash buyers usually want to move fast, and if they identify your home as a worthy investment, they won’t ask you to do any of that stressful stuff.
While cash buyers may offer less than traditional buyers, by waiving contingencies and agreeing to buy a home as-is, it may save you some money. In a traditional sale, the inspection may surface needed repairs. Usually, the home seller must pay to fix those problems or lower their asking price. Cash buyers tend not to care about that. They’ve built those costs into their offer already. Additionally, real estate agents tend to take up to 6% of your home’s sale price. If you find a cash buyer without an agent, you can save on that commission fee.
Finally, most cash sales require less paperwork. Many reputable cash buyers will handle the closing and paperwork process for you. And, since many cash buyers waive contingencies, you won’t have to review additional reports.