When you put your home on the market, you may think that it is ideal to sell your property to a buyer who offers an all-cash offer. While there are certainly some benefits to accepting an all-cash offer, there are a few things that you should be sure to know before moving forward with this type of transaction.
Speeding Up the Closing Time
One benefit of working with an all-cash buyer is that the closing time is likely to be faster. This is because the process of getting a mortgage loan approved and deployed typically takes 30 days to complete. Not only is this a time-consuming process, but a lot can also go wrong during this timeframe. If you run into problems, you might find yourself having to put the property back on the market in search of a new buyer.
Waiving the Inspection and Appraisal
When the buyer makes an all-cash offer, it is possible that you will be able to waive the inspection and the appraisal process. Not only will this also help to save time, but it can also help with saving money. I fact, it is not uncommon for all-cash buyers to agree to handle the minor repairs that you would otherwise have to address yourself if the home were to be purchased with the help of a mortgage loan. Whereas an appraisal is required if the buyer is taking out a mortgage loan, the same is not true with an all-cash transaction.
Obviously, the savings created by an all-cash offer may not always all go to you. In fact, the buyer may expect a discount on the overall price due to the all-cash offer. Therefore, you should be prepared to negotiate the price while also realizing that an all-cash offer will not automatically translate to more money for you.
Often, all-cash buyers are investors who are expecting to fix-up the home to flip it or to use it as a rental property. Therefore, when you deal with an all-cash buyer, you likely can sell the property as-is without having to make repairs or complete upgrades beforehand. In fact, the buyer may prefer handling these repairs and upgrades in order to ensure they fit certain parameters. This can help you save both time and money.
Of course, selling to an investor can have its difficulties, particularly if you are emotionally attached to the property. After all, the investor is not purchasing the home in order to move in and raise a family. Rather, the investor is looking for a way to earn and maximize profit. Therefore, you need to be prepared to become emotionally detached from the property when putting it on the market, particularly if you are going to accept all-cash offers.
Eliminating Problematic Contingencies
When you sell a property that requires financing, there are a number of contingencies that can stand between you and finalizing the sale. These include obtaining financing, clearing the appraisal process and completing any necessary repairs. With an all-cash buyer, you can skip over all of these contingencies, allowing the process to be completed more quickly and more smoothly.