What’s better than a cash deal? When it comes to selling your house, maybe nothing. Considering cash offers for homes or selling your home to a cash home buyer can help you walk away from the deal feeling like your pockets are being weighed downing. But what is a cash offer, and when is it a good idea to sell a home for cash?
WHAT DOES A CASH OFFER MEAN?
Cash offers buying your home for straight cash. Cash offers occur when a buyer offers a seller cash for the entire cost of the house instead of getting financing from a mortgage company or bank.
The typical home buyer obtains some type of financing to afford purchasing the house, typically in the form of a mortgage. However a cash home buyer will be able to purchase a home without a mortgage loan or other financial assistance. Cash offers are usually lower than the full market value of the house, but there are reasons why. First, cash offers are very low risk because sellers don’t have to worry about buyer financing falling through. Second, most of the reduction in the offer price is offset by the fact that the seller does not have to spend time, money, and resources on selling, upgrading, and negotiating the property.
IS SELLING A HOME FOR CASH A COMMON PRACTICE?
Cash offers have become quite common. The most common scenarios this happens is from an investor or investment company interested in a property. In these cases, a homeowner can typically sell their house as-is.
Some home buyers have cash on hand, such as from the proceeds of selling their previous home. Cash buyers are also common in competitive seller markets where financing delays may cause the seller to accept a more enticing offer. This occurs because the buyer who can afford to pay cash has an advantage on buying a property over mortgage buyers.
Also, if the property is what would be considered a flip, a cash sale can help the homeowner sell their house as-is. Cash buyers are usually welcomed if the property is facing a foreclosure, since in these cases homeowners typically must close quickly.