If you are looking at selling a home and making a profit, your first step is to list the home with a real estate agent. If the agent tells you that the home needs work, or it may not pass inspection for a conventional mortgage, traditional financing may not be an option. This can be challenging for some buyers to find a lender willing to secure the loan. One option is to do a cash-only sale. This eliminates a lot of the inspections and loan requirements. Here is how it can be a beneficial option in real estate.
Less Time to Close on the Transaction
With a cash-only sale, it takes less time from the initial offer to closing day. Once the offer is verified and the buyer produces proof they can secure the funds at closing, the deal can be finalized.
Cash home buyers will put a reasonable offer down on the initial real estate contract, along with terms to see if the seller will accept. Once accepted, the deal can proceed to closing. Setting up a time with the title company to have the documents drawn up can go relatively quickly. As soon as everyone is contacted, including any legal counsel or other interested parties, a closing date can be set.
No Strict Loan Requirements
With a traditional loan, banks often require home and pest inspections. For older homes, testing for lead may also be a requirement. With most cash sales, homes are sold as-is. Buyers know going in that there could be underlying issues, such as plumbing or HVAC problems, that need to be addressed. Cash home buyers are often investors or individuals who have money to put into fixing up the property. Bypassing bank restrictions often required with most conventional or government-backed loans saves time and money for both the buyer and seller.
Profits Are Competitive
Just because a home is a cash-only sale, doesn't mean the seller doesn't make a profit. A real estate agent will still request their commission and fees for listing and selling the property. These costs can be rolled into the final closing costs if necessary. Sellers can make more overall because there are fewer services being utilized and taken out at closing, such as inspections, multiple listing fees, commissions, and service fees.
Reduced Advertising Costs
Most cash sales go relatively quickly. A realtor or seller advertises the property through their agency or privately. This helps reduce overall advertising costs and keeps costs at a minimum. This is beneficial because it eliminates the need to price the property to stay competitive in the market. Most cash-sale homes are priced under market value.
A cash-only sale can be beneficial for everyone involved in the buying and selling process. If the home doesn't meet certain expectations set forth by the lender, that's ok. A cash-only sale will bypass the lender and get the transaction closed quicker. Whether it's sold as an investment property or will be someone's very first home, if they have the cash to work with, a cash-only sale can be a real time-saver.
Contact a company like Advantage Home Buyer to learn more.
