What is an Acceptable Cash Price for Your House?
As a home seller, you are looking for the best possible results. Not every home seller has the same priorities, though. Some are looking only at the selling price and the ultimate financial outcome—whether that’s a healthy profit, breaking even or minimizing what you still owe on the property. Others are purely looking for a simple and convenient solution. And finally, there are those who are seeking the fastest home sale possible.
Cash Home Sale
One option that may be presented to you is a cash offer. This will present you with an important decision to make. Most all-cash offers will be at a lower price than you might get from a mortgage-financed buyer. However, there are fewer strings attached. The home sale can be completed very quickly and easily, which may be of more benefit to you than a higher selling price. It’s smart to weigh your options and crunch the numbers before making such a big decision.
So, what is an acceptable cash price for your house if you choose to go this direction?
Who is Making Cash Offers?
First, you have to see what kind of offers you get. A majority of cash home buyers will be real estate investors who are looking for good deals. They are searching for reasonably priced houses that they can renovate and then either flip for profit or rent out for long-term financial gains. They are in a strong financial position with investor backing or cash reserves available from other real estate investments.
A cash real estate investor will most definitely offer you a lower price for your house. This is because they are typically buying it in as-is condition and want to get a deal done quickly. As a home seller, you will want to consider the price being offered and determine if the pros outweigh the cons. Yes, you are getting a lower price for your home, but are the other benefits worthwhile enough? An as-is buyer means you don’t have to worry about making repairs to the property or staging and marketing it for the open market. You don’t have to hire a Realtor® and pay their commissions. In many cash transactions, the buyer is covering most—if not all—of the closing costs, as well.
Time and Homeownership Expenses
This means that a cash home sale requires less money out of your pocket. Another consideration is time. The average real estate sale through a real estate agent and traditional closing process will take several months to complete. A cash sale can be finalized within a week or two. There is less red tape. There aren’t any buyer contingencies, extra home inspections or open houses. You also don’t have to worry about the buyer’s funding falling through as can sometimes happen with a mortgage loan.
This time factor will also reduce other out-of-pocket homeownership costs. Let’s say your house takes three months to sell through a Realtor®, which is actually pretty fast when you think about the time it takes to prep it for the market, advertise it, show it, wait for offers, go through negotiations and then complete the final closing/escrow process. Over these three months, you are still paying for utilities, mortgage payments, property taxes, homeowner’s insurance, HOA dues (if applicable) and general upkeep expenses.
Can I Get Cash Offers from Regular Home Buyers?
There is always a chance that you list your house on the open market and receive an all-cash offer from a regular home buyer. They may have the money available for a cash purchase. This is generally a dream scenario for a home seller because it will shorten the closing period and probably bring a bit more money than selling to an investor. However, these kinds of offers are few and far between. In addition, the cash buyer will still likely be offering less money compared to mortgage-financed buyers. They know the advantages they are offering and are using the cash offer as leverage for a faster and easier sale. These transactions will also usually still require home inspections and other standard closing services. They are not buying the house to flip. They are buying it to live in, and will want to go through the same safeguards as any normal residential home buyer.
So, what is the acceptable price for a cash home sale? That is ultimately up to you and your priorities. If you value a faster and easier sale, or you need to sell your property quickly, then you will want to seek out some cash offers from several investors and see which has the best price and overall terms. If you have time and money to invest in a traditional home sale, you may be better off with that solution. Ultimately, you have to explore your options, do the math, understand your priorities/needs and make the home selling decision that is right for you.
If you are interested in getting a no-obligation fair cash offer from PropertyLark, contact us today. It never hurts to see what kind of offer you might get. Then, you can decide if it’s worth your time or not.