The Pros and Cons of Selling Your House for Cash
There are different types of cash home sales. You may get cash offers on your house from a regular home buyer in a traditional open market sale. Or, you may get a cash offer from a real estate investor, whether it is a private deal or your house is publicly listed for sale on the MLS. It’s this second scenario we would like to focus on today. What are the pros and cons of selling your house for cash to a real estate investor?
Pro: Faster, Less Complicated Closing
A cash home sale can be completed very quickly compared to a traditional sale. You don’t have to invest any time making repairs or cleaning up the property. You don’t have to hire a real estate agent and go through the processes of staging, listing and marketing the house. Once the sale is under contract with the investor/buyer, the closing process can happen in as little as a week. This is because there is no mortgage loan to approve. There are no appraisals and an investor will usually buy the house in as-is condition. Any inspections they require will likely be less intrusive. The average open market sale will take 3-6 months to complete. The average cash deal is around two weeks from offer to closing.
Con: Quicker Decisions
Real estate investors are offering cash because they want the deal to be closed quickly with as few complications as possible. You may not have much time to consider the cash offer or shop around for more offers. Then, things will move very fast once you accept it and the closing process begins. You will have to be ready to move out sooner, as well. At PropertyLark, we let you set your own move-out date!
Pro: Fewer Expenses
One thing that many homes sellers realize after selling their house is just how much it costs to go through this process. You may spend money to make repairs and upgrades that will make the property more marketable. You will hire a real estate agent, who may utilize professional staging and photography. You will also be paying the buyer’s agent and broker commissions (up to 3% of the selling price) as part of your closing costs—in addition to other inspection fees and other closing expenses. Then, you also have to factor in your ongoing homeownership expenses (utilities, mortgage payments, insurance, taxes, HOA dues, etc.) you’ll still be paying for several months until the transaction closes. A real estate investor will generally cover most—if not all—closing costs in a cash deal. They won’t require repairs, upgrades, staging or real estate agents. Plus, the faster closing process means fewer ongoing homeownership costs. You’ll save a lot of out-of-pocket expenses.
Con: Lower Selling Price
Of course, there is a trade-off to having a faster, easier and less expensive home selling process. A cash real estate investor will generally be paying you the lower end of fair market value. You will likely sell for a higher price if you hire a Realtor® and go through all the traditional steps to prepare and market your property for an open market sale. Just remember that a higher sales price doesn’t always mean a higher profit. In most cases this is true. However, when you factor in all the expenses listed above, there are some cases where a home seller will actually come out further ahead with a quick cash sale to a real estate investor.
Pro: Getting Out from Under a Financial Burden
You may be in a situation where you need to sell your house as soon as possible. Examples include divorces, unwanted inherited properties, job relocations and financial distress (tax default, pre-foreclosure, etc.). These are scenarios where a cash home sale often makes the most sense. You don’t have the time and money to go through a lengthy traditional sale. You need to get out from under the financial burden of the property and move on with your life. Though it is always worth exploring every option available to you, a fast cash sale may be your best solution.
Con: Giving Up Your House
Financial distress is tough. It’s emotional and stressful, especially when you have to give up your house. Unfortunately, bad things happen to good people and you have to make smart decisions with your most significant financial asset: your house. PropertyLark will work with you to look at different home selling or seller financial solutions, including a fast home sale or a traditional sale through one of our licensed real estate agents. We’ll help you make the right decisions based on your specific homeownership and “want vs. need to sell” situation.
To get started, please fill out the contact form on any page of our website. Tell us a little about you and your property. We can get back to you with a fair cash offer within 24 hours and/or set up a private consultation to discuss your specific options.