Thinking of Requesting a Cash Offer on your Home? What you need to know.
I am sure everyone has seen the “We Buy Houses” signs on the side of the road or at intersections, or possibly advertised on Television or Radio. They offer to buy houses in any condition and settle quickly. The majority of the investors that advertise this way are wholesalers. What a wholesaler does is create a contract with a homeowner to purchase the home at an agreed upon price, and then they market the house to a list of local cash investors to find a buyer at a higher price than they have contracted with the homeowner for. Most of the Wholesalers do not have Cash to purchase the home and are relying on other investors to contract with them. Be very careful when dealing with these types of contracts, as they are one sided, and can be very difficult to cancel, if the wholesaler is not able to find a buyer.
Selling your house to iBuyers is another option. The term iBuyer encompasses a group of companies like Opendoor or Offerpad, who purchase homes for cash. These are larger companies who buy and sell thousands of homes, so they typically have larger margins, and can offer a higher cash offer than other local investors. These buyers do have cash to complete the purchase and can settle quickly, however there will be fees involved in many cases. The steps you take with an iBuyer are;
- Visit their website.
- Type in information about your home and request a cash offer.
- Decide if you want to accept the offer.
- Communicate what your preferred closing date is.
- And close within as little as 10-14 days.
Finally, there are Trade-In programs, these companies will purchase your home at market value for a fee and allow you to stay in the home while you search for your next home. Knock is one of the more well-known companies that offers this type of solution. This is a great solution to avoid the need for a home sale contingency, however you will pay a premium for the program. It may be worth it if it helps get your offer accepted on the home you are attempting to buy.
So with any of the cash offer options available keep in mind you are selling to investors, the offer price will always be significantly lower than what you could sell your home for through a traditional selling channel.
Who Should be Considering a Cash Offer on their House?
Now that we have identified who the majority of the cash offers are coming from and what type of offer you might expect, next lets discuss who should be considering cash offers.
Home Sale Contingencies, this is when your loan to purchase a home is only contingent of your existing home being sold. While you can get an offer on a home accepted with a home sale contingency, it has become much more difficult with the low inventory and strong sellers market. Under these circumstances a Trade-in program cash offer may be right for you.
Distressed Homes, or Estate Sales, this category of homes are those that require significant updating or renovations. In some cases, homes are inherited from family out of state, or in very poor conditions. Many times, this is too much for a homeowner to take on, and it is easier to work with an iBuyer to obtain a Cash offer and leave the heavy lifting to an investor.
Regardless of the situation, it is always in your best interest to work with a REALTOR, to obtain the market value of your home, along with the estimated time to sell the home in its current condition. Knowing the value of your home before you speak to a cash buyer, will put you in the best position to make the most educated decision.
Want to Sell Quickly without any hassle. Unless you are ok leaving $50,000 or more on the table in order to get a quick sale, you should definitely list your home on the MLS and get the most exposure. In the current market homes that are priced right and marketed properly are going into multiple offers and selling above the asking price. Work with a professional REALTOR, and your home will get sold quickly and Hassle free
To wrap things up, Cash offers can get you to settlement much quicker, but in most cases at a lower sale price. There are circumstances where this will make sense, but always speak to a professional REALTOR for guidance.
My Company EXIT On The Harbor Realty has some exciting news! We just launched a brand new website that gives you all of these options and more. www.HomeSellingChoices.com is a new platform that allows you to obtain an immediate online home price valuation and choose how you want to sell your home. You can request Cash offers, and we will search multiple Local and National investors to receive multiple cash offers for you. The site also offers a Free listing only platform, A Flat Fee MLS listing option, a revolutionary bidding platform, offering 0% commission for the seller, as well as our standard Full Service traditional listing. Feel free to visit the website for more details or contact us for any of your Real Estate questions or needs. We are happy to have a non-salesy conversation with you and help you choose the best solution for your individual needs. We are not commission driven; we are people focused. Building a relationship with our community grows our network and ultimately grows our business.