Read This Before You Sell Your Home for Cash: Must-Know Pros and Cons

If you’re a homeowner considering the option to sell your home for cash to a real estate investor, then this must-read list of pros and cons is for you!

Did you know that the housing market got influenced by the 2008 economic crisis?

As a matter of fact, the homeownership rate declined since 2005. Right now, the rate sits at 64.2%, a surprising slight increase after a decade of decrease.

If you’re in need of money, you might opt for a personal loan to cover for it. Sometimes you might not have the means and might sell your home for cash. Read on if you want to know how this affects you.

Pros

If you’re selling a house to a cash buyer, these are the pros you can expect. Read more here if you want a more in-depth discussion on the pros of selling your home.

1. Investors Buy As-is

There are a lot of people who can’t afford to repair their homes before selling, so if you don’t have the means of funding significant house renovations, cash offers become appealing. After all, your investors will buy your house in its current condition, no matter how bad it might be.

Completing the repairs on your own will cost you both time and money, and a lot of those renovations are necessary to put it up on the market. But the problem lies with the fact that you won’t get as much money in return.

You’ll get a low return on investment for projects like bathroom remodels. So if you want to make the most money, you can sell houses for cash instead.

2. You Avoid Contingency Clauses

There are a lot of contingency clauses on house contracts, and this helps protect buyers since they can back out of the deals. But these can become detrimental to you as a seller.

With this, you need to always keep vigilant when reading contracts since the fine print might say that the buyers only honor the offer if you meet certain conditions. It might be a time limit or something similar.

Either way, you don’t need to worry about it when you’re selling houses for cash since investors don’t need these contingency clauses. It’s an extra hurdle you avoid, making the process more convenient for you.

3. Financing is Different (In a Good Way)

The reason it takes forever to sell homes is due to the banks’ involvement. When borrowing money, you’re working on their timeline since the banks won’t care about your time constraints, regardless of reason.

Financing is the area home sales don’t excel in, that’s why it’s better to sell homes for cash since you don’t deal with banks at all. The investors often pay for any closing fees once you’re done with the deal.

4. Selling is Quicker

If someone shows interest in your home, you don’t need to go through all the processes that involve listing your home. You don’t need to hire professional photographers to make your house look attractive. It’s not required to spend hours to figure out a great marketing description as well.

You’re most likely not going to have an inspection. This allows you to skip out of any responsibilities involving repairs. With this, you also bypass any lending steps common when selling houses.

Often, all you need to do is to call investors. They’ll ask you some questions and make offers based on your answers. You can choose to take it or try somewhere else, making it quick.

Most deals close within a week or two, so you get money without waiting for long. The simplicity and speed can make it a better deal if you don’t have all the time in the world.

Cons

Selling homes for cash is a great way of getting money. But it’s not all benefits for you since there are drawbacks when you opt for this option. Here are some of the few:

1. You’ll Get Lowballed

Any investor buys houses for specific prices. Yet it’s important to remember that you’re trading speed with money when it comes to cash sales. A vast majority of your potential investors will try buying your home for a lot less than its real value.

In most cases, companies will offer around 65%-80% of your home’s fair market value. This means that you get an average of 23% less value per square foot of your property. Remember, investors aren’t buying because they want to live in your home.

Your investors aim to flip the property and sell it at a higher rate for profit. So if you want to get a lot of money, you’re better off hiring a reputable listing agent. You can still get better offers even if your asking price is lower when using the traditional methods.

2. Most Investors Aren’t Local

Companies that buy homes for cash often run a nationwide business. What this means is that they have minimal knowledge of your locality. They’re buying your house with no regard to certain factors since all they care about is to resell it faster.

That means they won’t take your neighbors into consideration. They won’t care whether your area is close to a lot of great places. They’ll disregard the fact that your neighborhood has a low crime rate.

If you want to get a better deal, you might have to sell your house to locals. These people will care about these factors and put it into consideration. That way, you get someone who can use your house and add more to your beloved neighborhood.

Learn How to Sell Your Home For Cash Today!

If you want to sell your house, you need to understand your options. When you’re not concerned about the time it takes, you can go with the traditional method. There are a lot of things that you need to do, but in the end, it will get you a higher monetary value.

When you sell your home for cash, you can expect a fast deal. But it’s often lower than your actual home’s worth. If you don’t want to pay more for renovations, this option is the best.

Do you need tips for selling your home? Check out our guide here and get more tips for a good asking price.