Despite the pandemic, the housing market has never been busier. Many homeowners want to sell their homes, often quickly, for a fair price. One question that we come across from homeowners is: Are cash buyers better? The short answer is yes. Cash offers are better for both sellers and buyers, so it’s a win-win situation for both parties.
Although, when sellers receive a cash offer for their home, they may seem a bit hesitant to accept it because it may not seem like the typical process. However, cash offers are more common than you may think. According to ATTOM Data, cash offers make over a quarter of all home sales in 2018. Cash offers work a little differently than the traditional mortgage offer but have many advantages. Overall, they are a much stronger offer than a usual mortgage loan offer.
No need for cleaning, listing, and staging your home or making those expensive repairs to pass inspections
With cash buyers who will buy your home “as-is,” accepting a cash offer has tremendous upsides.
First, homeowners can list their homes as for sale “as-is. Also, with cash buyers who will buy homes “as-is,” homeowners do not have to worry about cleaning out their homes for prospective buyers. Cash buyers who offer an “as-is” deal will often offer to clean out your house for you. You won’t have to worry about listing the property and staging it for photos and showings.
Second, with a cash “as-is” offer, a homeowner won’t have to worry about making expensive repairs so the house would pass a home inspection. Home repairs can cost tens of thousands of dollars and add additional headaches and time to selling a home. Many lenders will refuse to allow a buyer to purchase a home if it has major repairs needed. This point leads us to the next benefit of all cash offers – eliminating the need for lenders.
Third, home inspections caused 17% of all delays in the selling process. If a homeowner wants to sell their home “as-is,” a cash offer from a company like MarketPro can eliminate the need for a home inspection, saving both time and money. Finally, home renovation and repairs costs have soared in recent years. Home renovation costs increased by 50% in 2020. Also, demand for renovation materials increased significantly as did demand for labor. Supply chains have struggled to fulfill homeowners’ demands for building materials and labor, and so costs soared. Repairs and renovations will add more time and money to a homeowner’s selling process.
Cash Cuts Out the Money Middleman
The new realities of the financing world can place barriers between buyers and sellers to get the deal done. The major upside of an all-cash offer is that it takes the lender out completely. Homeowners only have to deal with the seller. If the potential buyer has proof of funds, this makes an all-cash offer extremely attractive. Also, with a cash offer, homeowners can avoid the whole appraisal process altogether. Many lenders require home appraisals, which takes up more time and can add more than a week to the selling process. Also, the appraisal process can lead to snags for closing the deal, even with fully-qualified buyers. Appraisals caused approximately 18% of delays in the closing process. Because appraisals compare selling prices of comparable homes in the neighborhood, the lender has to ensure they don’t issue a loan that’s more than the house is worth. If the home is worth less than the asking price, this issue can scuttle the sale and cause more delays. The buyer with a mortgage offer will have to ask the seller to lower their asking price, which is more time lost. Additionally, 41% of all delays in the selling process were due to buyers having lending issues. For cash offers, a potential cash buyer can provide a guarantee of payment to ease any fears by the homeowner that they don’t have the money to buy their home.
A Cash Offer Speeds up the Selling Process
Especially when homeowners are dealing with major life changes, an all-cash offer can significantly make the selling process easier and faster, especially when time is of the essence. When a buyer makes a cash offer, it greatly speeds up the selling process. All the usual steps for a buyer to get a mortgage – the application, documentation, underwriting, and appraisal – are not there so the process goes much more quickly. You don’t have to go through a realtor whose fees can add up quickly, list the property, do open houses, or pay for home inspections and closing costs.
Selling to a cash buyer can enable a house to close in as little as two weeks, whereas the average time for a house to close with a mortgage was an average of 43 days. If a homeowner has to sell their house quickly, a cash offer is the way to go. The advantages of a cash offer include the zero risks of a third-party financing falling through, less contingencies to scuttle the deal, no mandated appraisals by lenders, and the closing process is usually much faster.
If you decide to sell to MarketPro Homebuyers, they will make you a cash offer and buy your house “as-is,” so you don’t have to worry about fixing up or cleaning out your home. To learn more about our services, contact us at (301) 994-7355. Someone will get back to you quickly.