The speed of the cash buyers process and quick closing times in real estate transactions can be appealing to sellers looking for a fast and hassle-free closing.
The traditional hurdles of a mortgage approval process, and appraisals and inspections can be eliminated or done quicker in most cases.
The downside of this process can usually be found in making sure the buyer gets clean title to the property they are purchasing.
Almost every cash buyer is going to look for clean and marketable title.
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What does this mean? In short, a clean and marketable title is when the owner of a property has complete control of the property titled in their entity name but can also be sure they will be able to sell this property without any liens against it.
There is also insurable title, which is not the same as marketable title.
The difference is:
Marketable title is title to a property that is free and clear from any defects. Insurable title is title to a property that an insurance company is willing to ensure, irrespective of there being any type of title defect.
Plus there are even more benefits of selling for cash if you need a speedy closing, like if you are being transferred for a job, moving before a certain date, or a need to sell this home to purchase another one.
Here are some other possibilities that may also be attractive to selling to a cash buyer.
Eliminating Financing Contingencies:
Many cash buyers don’t need to rely on mortgage financing. This eliminates the lengthy approval process and potential delays associated with loan underwriting.
This will eliminate most of the worries that the deal will not close because of financing issues.
How many times have you heard that the buyer didn’t qualify for a loan, so the house is back on the market?
Quick Closing Times:
With no mortgage related issues, the process can significantly reduce the closing time. Traditional sales through loan buyers can take 30 to sometimes 60 days to complete.
Cash transactions will most of the time take lea than 30 days from signing to closing.
Reduced Paperwork:
With no need for extensive documentation, the whole process can move quicker.
Some cash buyers will want to do an inspection, although those can be done in a matter of days now, and the seller can limit the timeline for an inspection to be completed by, before the closing takes place.
As-Is Sale:
Cash buyers are often more willing to purchase properties in the condition they are in.
This can be an advantage to the seller if they have a time deadline to sell by.
Plus, there should be no need to do extensive repairs or improvements to a property, thereby saving untold amounts of money.
Flexible Negotiations:
Cash buyers can be more flexible in negotiating everything from the closing date, to how you vacate the home.
If you have made some recent improvements, maybe within the past year, a cash buyer can negotiate with you for a better price if they know about them.
Appraisals:
Cash buyers should not expect you to have to go through the appraisal process to know the value of the home.
If they do, they do not know their market very well. They should already know the market conditions and make offers based on that and the conditions of the home.
Competitive Pricing:
If your property needs some updates or it hasn’t been updated in many years, how you price it will determine the type of buyer you get to make an offer.
Consider the condition as to what kind of buyers you want to attract.
If your home is in pristine condition, you may consider a higher price, but be willing to bend on the price for a cash sale, as you may be in a time crunch.
Multiple Offers:
This happens with cash sales as well as traditional ways of selling.
If you are in this position, you have the advantage of choosing the one that fits what you consider the best one for your circumstances.
You will need to take into account the different offers, the terms, closing timelines, and any other factors as well as prices being offered, to determine which one is best.
Documentation:
When you are considering selling to a cash buyer, and want a quick closing, there are things you can do to help speed up this process.
If you have the deed, even if you have a mortgage that will be paid off at closing, having this paperwork handy for the title company to use will ease the need for longer waits for everyone.
(Never give this paperwork to your cash buyer).
This also would include prompt response times. Quick responses to offers, requests for information, and other inquiries will maintain the momentum of the process.
The speed of a cash sale can vary depending on market conditions, prices, and property specifics.
While the process is generally faster than a traditional sale, unforeseen circumstances can delay a sale.
It is advisable to work with seasoned professionals, although someone brand new in the real estate business can be as professional as the next, some due diligence is required on your part.
Make sure of who you are working with. If you can verify the credentials of who you may be working with before you sign a contract, do just that.
Consider legal advice if you feel you need it.
Never take the word of anyone that they can buy your home without using a title company or attorney.
Additionally, be cautious of scams and unethical practices. There are many details to a cash sale, and if it feels like you are being manipulated to sign something, have it checked out first.
What Kind of Questions Should You Ask a Cash Buyer?
Do they have the funds needed to close?
Ask them to verify if you need to.
Closing Timeline?
It is essential that both parties align expectations.
Due Diligence?
Is their walk-through inspection enough, or will they need to conduct a more thorough inspection.
Contingencies?
Are there going to be any specific contingencies added to the contract for purchasing the home.
Earnest Money?
Are they willing to put up an Earnest Money Deposit?
This is crucial to demonstrate their commitment to see this transaction through.
Closing Costs?
Are they expecting you to cover any closing costs, and which ones.
Closing Process?
Are they using an attorney or title company.
Previous Transactions?
Have they completed other transactions in cash. If so, how many have they done, and how long have they been in business.
This should give you much of the information you will need to make sure you have a quick, smooth transaction, when selling to a cash buyer.
If you are considering selling, for a cash offer, please see OURCASHFORYOURHOME.COM, OR CALL 727-487-1585