What is the Closing Process for a Cash Sale?
If you are selling your house in a traditional manner, the closing process can be fairly complex. We’re talking about a sale with a real estate agent and to a buyer who is funding the purchase through a mortgage loan. This is how a majority of real estate transactions happen in the United States.
With a traditional closing process, there are usually many parties involved and a number of things that need to happen in order to officially complete the sale. There will be the seller, the buyer, both of their real estate agents, lender, escrow company, title company and sometimes even a real estate attorney. Then, you have home inspections and other key steps that have to be completed. Most traditional home sales will take an average of 30-45 days to go through the final closing process, which starts once the offer is accepted and the sale goes into contract.
How Does the Closing Process Differ for a Cash Sale?
Some real estate transactions are cash deals, where the buyer is paying all cash for the house. This simplifies the process significantly by removing the mortgage loan variable. You aren’t waiting for the buyer’s financing to be approved and funded. The mortgage process can sometimes delay the closing process or derail the transaction completely. A cash deal takes the mortgage loan out of play and that helps streamline things.
Regular Cash Home Buyer
How long or how the rest of the transaction works may depend on the cash buyer. Some cash buyers are just regular homeowners looking to buy a new house. They have saved up money, cashed out equity on another home or are being financed in some other way that they don’t need a mortgage loan. How they get their money isn’t a concern for you as a seller, as long as they can prove they have the cash to buy the house outright.
In a cash sale to a regular cash buyer, all the other aspects of the closing process will still be required. There will still be third-party home inspections, title companies and possibly real estate agents and attorneys involved. A buyer can opt to waive home inspections at their own risk, but most regular home buyers won’t do this unless they are desperate to purchase a particular property. They still want to go through these important steps to make sure they are getting a house they think is worth the investment. As you might expect, a bad home inspection can also cause problems in any real estate transaction.
However, without the mortgage component, the closing process for a cash sale can be done quicker and with a few less headaches. This is good for the buyer and seller, who both want the transaction to be finalized with as few complications as possible.
Cash Real Estate Investor
The other common scenario for a cash home sale is when a real estate investor buys the property. They are offering cash or they have their own financing locked in, and therefore no mortgage loan is required.
Many cash investors are willing to forego some of the traditional closing process steps, so the timeline and procedures may vary a little from buyer to buyer. They may waive a third-party home inspection. They may not inspect the home at all or they may perform their own basic inspection of the property before making an offer. Many real estate investors are typically looking to buy houses in as-is condition. They plan to renovate and make their own upgrades to the property, so they are less concerned about what kind of repairs may be needed.
This is a huge advantage to the seller because it eliminates one more variable and can streamline the closing process even more. Cash sales to real estate investors can take a week or two to complete, rather than a month or longer. At PropertyLark, we’ve been known to finalize cash sales in as few as seven business days!
Explore Your Home Selling Options
How you choose to sell your house is up to you. You should always explore all your options and decide if it makes sense to pursue a traditional sale through a real estate agent or not. You should also consider and review all purchase offers carefully. For example, a cash offer for a little lower selling price may be a better offer than a higher price with a complicated mortgage loan and a lot of buyer contingencies that could cause problems during the closing process.
If you are thinking about selling your home, PropertyLark can help you explore all your options and we can also provide you with a no-obligation cash offer within 24 hours. Fill out the contact form on any page of our website to get your cash offer today!