Pros and Cons of Selling a House for Cash
Last Updated on February 17, 2023 by Kravelv
Selling your house for cash has fewer challenges than traditional home selling. Homeowners may consider selling a house as-is in Missouri for various reasons. Most homeowners who want to sell their homes fast consider cash home buyers. This might occur due to job relocation, looming foreclosure, or when there’s an urgent need to get rid of an old or second property.
If you’ve sold a home before, you understand the challenges involved in the process. The process involves showing, waiting for financing, and negotiations, making it tedious. Besides, homes on sale rarely move quickly unless in a hot seller’s market. Selling a house for cash is an excellent way of speeding up the sales process. While selling a home for cash is fast, it comes with its fair share of challenges. Below are the pros and cons of cash offers.
Benefits of Selling a Home for Cash
1. No need for home improvements
There are no contingencies involved when selling your home to cash home buyers. In a typical market, homeowners are expected to make repairs and undertake various home improvements before listing their homes. This comes with additional costs and stress for homeowners. Genuine cash homebuyers buy properties as is. This means homeowners don’t have to repair slightly damaged roofs, plumbing, and other structural issues.
2. Fast closing and flexibility
Selling your home through financing or the conventional selling process takes between 30 and 60 days for sellers to close the sale. This won’t favor homeowners who need quick cash or need to relocate within a short period. Cash home buyers and home flippers buy homes for cash, which shortens the sales process compared to waiting for mortgage approval and other financing options.
3. Saves on real estate fees
Homeowners also avoid a lot of costs that come with selling a home to mortgage buyers. For starters, you avoid the common realtor’s commission, which costs 6% of the total selling price. This is a significant deduction, especially for homeowners selling their homes to avoid foreclosure.
Apart from agent fees, cash home buyers also eliminate bank fees, inspection costs, and many other quickly accumulating processing costs. Cash home buyers handle all the paperwork directly with homeowners, eliminating the need for involving buyer and seller agents.
4. It offers better certainty and avoids surprises
Buyers relying on loans, mortgages, and other financing methods can pull out midway due to failed approvals. Your property can also fail to pass inspection, or they can find other better-looking properties as they wait for mortgage approval. You can avoid these surprises by selling to cash home buyers.
5. Easy way to convert inheritance to cash
Most people cannot settle into generational and heritage homes gifted to them by their parents or grandparents. Generational homes are typically old and require significant repairs and improvements for homeowners to list them for sale. Selling such properties for cash is an easy way to convert your inheritance to cash.
Cons of Selling a Home for Cash
While selling your home for cash is beneficial to sellers, it comes with the following drawbacks:
1) Less competition
While selling homes for cash is increasingly becoming popular in the real estate market, cash home buyers are still very few. This means very few people will be interested in buying your property. This cannot be compared to traditional home selling, where sellers can leverage industry trends.
2) Low selling price
Cash home sellers enjoy the speed and convenience of cash sales at the expense of the selling price. Limited competition coupled with selling your property as-is means that cash home buyers negotiate the price to their favor. Homeowners typically receive between 60 to 80% of their market value. However, this is a better bargain for homes that would cost more to repair or refurbish.
3) Difficulty in proving funds
While selling a home for cash has better certainty than the traditional selling process, cash home buyers should have sufficient cash to make the purchase. Selling to accredited cash home buyers and real estate investors is safe. However, if you sell to individuals, ensure that the potential buyer proves the availability of funds before closing the sale. Otherwise, you can end up with a bad check.
Unlike before, more real estate companies currently offer cash for homes. While some focus on dilapidated homes that require extensive repairs, others specialize in homes that require minimal touches. Selling your home for cash allows homeowners to escape the middlemen and costs involved with the traditional selling process. However, you should understand the cash selling process and weigh the above pros and cons to decide whether you should sell your property for cash.