If you’re trying to sell a home or are planning to put one on the market, you’ve probably noticed the prevalence of advertising for cash home buyers. Whether they’re in print or on TV, they’re everywhere.
Selling a home can be a physically and emotionally daunting task. There are decisions to make at every turn, and for some homeowners, it’s difficult to make the right choices. We’re here to help make the process as simple and painless as possible.
Quick home sales are beneficial for most people. No matter your situation, you’ll find that the changes that come with a cash sale are welcome ones. But just as with other important decisions, there are benefits and disadvantages to consider.
In this guide, homeowners will learn the pros and cons of selling a home for cash.
Why Would Someone Want to Buy My Home for Cash?
There are several types of organizations and individuals who buy homes for cash, such as:
- Rental investors. A rental investor typically buys a home to rent it out for an extended period, generating a steady stream of passive income. (1)
- Flippers. A house flipper buys properties in need of renovation or repair. Once a house has been fixed, they put it on the market and sell it for a profit.
- High-volume home buyers. A high-volume buyer typically focuses on homes that are in good
shape. Because the profit margin is lower than that of a house flip, a high-volume buyer relies
on buying and reselling homes in greater quantities.
What Are the Advantages of a Quick Home Sale?
- Cash offers. The biggest benefit of working with cash home buyers is that you’ll get a straightforward, transparent cash offer. There’s no need to wait for a bank to finance a buyer, and no worries about low appraisals. Finally, there’s no need to deduct a real estate agent’s commissions and fees from the sale price.
- Simplicity and speed. With fewer hands in the till, selling to cash home buyers is much faster than going the traditional route. Cash sellers don’t have to deal with agents, lenders, appraisers, inspectors, and banks. In most cases, buyers and sellers work one-on-one. By comparison, it can take months or years to sell via an agent depending on the home’s location and condition. If you want to sell quickly, a cash buyer is a great alternative.
- Less likelihood of a failed sale. Negotiating a home sale can be very frustrating. Many times, sellers and buyers go back and forth repeatedly before agreeing on a price. This typically happens after showing a home and answering numerous questions from a buyer. In simple terms, it takes a lot of work on a seller’s part to close a deal. All that work goes to waste if the buyer fails to qualify for financing or has poor credit. Such failures put sellers in a bind, forcing them to start from the beginning and keep their homes on the market even longer. Cash deals prevent these issues, as there are no loan or credit qualifications to consider. Therefore, a cash sale is an effective way to prevent a deal from falling through due to external factors.
- A reduction in paperwork. Selling a home isn’t always fun, and there’s a mountain of paperwork to wade through. The number of forms to sign, read and initial may be overwhelming, and even a minor error can be costly. However, reputable cash buyers handle the paperwork on your behalf. Not all companies offer such services, though, and if you’re working with a buyer, be sure to read their references and reviews to learn how they’ve helped other local homeowners.
- No closing costs are required. A major disadvantage of the real estate market is the money sellers lose to commissions and fees. (2) When sellers work on low profit margins, a real estate agent’s commission and other fees make those margins even narrower. With cash sales, however, added costs are drastically reduced. Transactions are easy and clean because the buyer doesn’t have to go through a lengthy qualification process. Because it’s an item-for-cash exchange, it’s much simpler.
- Sellers can decide when to move. When selling to a company like Gem Homes, an owner can remain in the home for up to a year. That allows sellers to regroup and plan a move on their own schedule. We’ll work with you to make the process easy on the entire family.
- The simplicity of an as-is sale. Before a home makes it onto the open market, it may need some repairs and upgrades. Whether you’re updating a room to increase its appeal (such as a dated bathroom or kitchen) or repairing serious damage such as a foundation crack, roof leak, or wiring issue, real estate agents typically get the best sale prices for homes that are in top condition. However, you may not see a very big return on such an investment. Many times, homeowners spend tens of thousands of dollars on updates, only to see their homes sell for less than market value. A cash home buyer isn’t focused on these upgrades. We’ll buy a home as-is, which helps save money on expensive repairs and renovations.
Working with a cash home buyer has a few other notable advantages. It allows owners to quickly unload
properties they’ve inherited, and it makes it easy to get a fresh financial start while avoiding foreclosure.
With a quick cash sale, owners can easily downsize or relocate for a new job. If you’ve tried to sell your home without success or if the property has issues that make an open-market sale challenging, working with a cash buyer is a viable option.
Does a Quick Sale Have any Disadvantages?
While the quick sale process comes with numerous benefits, it’s not right for every homeowner. In this section, we’ll give you the information needed to make an informed decision.
- You’re less likely to get the full market value for the home. When homes are sold to cash buyers, owners rarely get the full market price. An investor takes a risk by buying a home as-is, and the lack of fees, commissions, and other costs is factored into the offers they make. It’s important for sellers to keep in mind that they’re getting cash just a few days after the initial contact. That speed and convenience comes at a cost.
- It’s a buyer’s market. Most companies are reputable and honest, and we at Gem Homes are proud to be in that category. However, not all companies are so aboveboard. The cash home buying industry is full of shady characters, and it’s easy to be swindled. Just as one would with any company they’re considering hiring, a cash seller should do their research when choosing a home buyer. Be sure to learn about the company before hiring. Look for consumer reviews and ratings from the Better Business Bureau. Closely monitor your credit file and be wary of companies requiring upfront fees. A cash home buyer can be a life saver, but it’s crucial for sellers to protect themselves and their properties.
- No licensing is required. Investors aren’t representing a seller or a buyer during the sale process, so they don’t need a real estate license. (3) Some investors work alone, while others are part of large corporations. Don’t choose a cash home buyer without doing some due diligence. Ask a representative about the company’s credentials and experience, and if the company is reputable, they’ll gladly offer that information.
Quick cash sales have a few other big risks. Some less-ethical companies make agreements to purchase homes, only to reduce the offer in the end. In some cases, fee structures are unclear, which puts a seller in a bind due to hidden fees and unexpected costs. Not all property valuations are fair and honest, and some companies’ contracts prevent owners from selling their homes to anyone else making a higher offer.
Will a Cash Buyer Give Me the One-On-One Attention I Deserve?
Though we know you have several options when selling a property, we can offer a fast, seamless sale. A real estate agent may work with a dozen clients at once, which means they may not be able to provide the dedicated service needed for a quick sale. On the other hand, a cash buyer only works with one client at a time, which means they can provide the individualized service a seller may need.
Gem Homes’ cash buyers are local real estate specialists in the Lubbock, Texas, area who can quickly and easily determine the value of a home. We offer a simple selling process that allows you to get money for a property and move on with ease.
Is Selling My Home for Cash the Best Option?
There are several things to think about when considering selling a home for cash. First, you’ll have to find out if the company making the offer is honest and if they’re going to give a fair price. The team at Gem Homes is ready to help you get cash for your home in the Lubbock, Texas, area. Fill out our online contact form or call today to get started.
References
- Million Acres
https://www.fool.com/millionacres/real-estate-investing/rental-properties/ - U.S. News & World Report
https://loans.usnews.com/what-are-closing-costs - Under 30 Wealth
https://www.under30wealth.com/real-estate-agent-license-investing/