Cash offers can be an appealing option if you are trying to get a home sold quickly and need the guarantee it will sell. You can also avoid having to make your home look presentable and taking the time to list the home on the traditional market. This makes considering a cash offer a popular option for those that want to just get a home sold and avoid stress and headache. Accepting a cash offer can mean that you take a lower selling price for your home, so selling to a cash buyer should be a decision made with a great amount of thought by the homeowner.
Who are these cash buyers, anyway?
As a group, cash buyers or house buying companies by definition are individuals or entities that buy your house outright and all at once, without the need for lender financing.
In general, selling your home to a cash buyer allows you to skip the home prep, showings, and staging hassles and arrange a more flexible closing timeline to coordinate with the purchase of your next residence.
But not all cash buyers have the same conditions and policies. In fact, these buyers have evolved into a few larger categories:
1. Buy-and-hold investors
Buy-and-hold investors purchase homes and convert them into rental properties. Within the buy-and-hold category, you have individual investors who purchase and rent out properties for passive income. As a seller to buy-and-hold investors, you have more flexible closing dates and you’ll likely get better pricing than if you were to sell to a house flipper.
2. House flippers
These people are more like your remodeling-enthusiast uncle; they buy homes, typically in a poorer condition and at a lower cost, with the intention of renovating and flipping it for more.
3. Wasatch House Partners
One of the biggest (and newest) players in the sell house for cash world is the tech-savvy and data-driven Wasatch House Partners, short for “instant buyer.” Wasatch House Partners use automated valuation models (AVMs) to make competitive offers on residential homes that are typically in better condition. Since Wasatch House Partners typically make less profit per flip, their business is more reliant on turning over a high volume of homes using technology to streamline operations. As for the seller? There’s no staging, no open houses you avoid the long drawn-out traditional home sale process and can close in a matter of days once you accept an offer. Wasatch House Partners generally offer better pricing, up to 98% of fair market value, while charging sellers a fee around 7%-10% plus the cost of necessary repairs.
According to a study conducted in U.S. cities early this year, Wasatch House Partners acquired 1% of all home purchases in those markets in 2019. That may sound like a small portion, but it’s nearly double that of the prior year, indicating that a growing number of sellers are shifting to the speed and convenience of this relatively new model.
Although COVID-19 suppressed Wasatch House Partners purchasing as much as 90% — and 2020 Wasatch House Partners activity will shrink compared to the year prior because of this — Wasatch House Partners are cautiously re-entering the market and will likely be a long-term fixture of the greater real estate landscape.
How Quickly Do You Need to Move?
Putting a home up for sale by traditional means can take a considerable amount of time, even in a sellers’ market. If you do not already know an agent, you will need to spend time finding the right one, take the time to prepare your home, make sure the agent is marketing it well to get it in front of buyers, and then there is the closing process which can take months. Working with a reputable cash buyer that can prove they have the funds to purchase your home allows a homeowner to close when they need to.
Is Money Really Tight Right Now?
Some homeowners do not have the funds to get their home ready to sell, even if it is just money for small repairs (house repairs quickly add up). There are many people who find themselves without extra funds right now. Selling your home off market allows you to avoid the fees of selling a home from repairs to staging to closing costs and agent commissions.
Are There Repairs I Just Can’t Make
All homes age and need maintenance as they age. It is not uncommon for some homeowners to find themselves in a position where they can’t fix a problem in the home that just can’t be ignored any longer. Selling a home in need of major repairs traditionally can complicate and slow things down. Cash buyers see homes in need of repair all the time; it does not scare them off. In fact, many of them have a better idea of what the home is truly worth even with the need for repairs whereas the average buyer will not and might be very difficult to work with.
Would It Still be Beneficial to Sell at a Lower Price?
One of the biggest things that deter homeowners from selling their home to a buyer that promises a quick cash offer is that the offer is usually lower than they might receive from selling their home traditionally. In many cases, a cash offer is still beneficial when thinking about the amount of money and time it takes to sell a home. Reputable cash buyers are still going to give a fair offer for your home, yes it may be less than other offers, but it just may be almost the same amount of money after deducting fees, taxes, and the cost of getting a home ready to sell. Then you have the added bonus of a much faster sale to make it even more worth the decision to sell for cash.
Things You Should Know About Selling Your House For Cash
1. Some direct buyers will purchase your house as-is.
If your home is in need of some significant repairs before you can put it on the market, a cash offer might look pretty appealing because some investors will buy a property “as-is.” Each investor has their own terms and criteria on the type of home they’d purchase, like the price of the house and its condition. Flippers specifically aim to purchase rundown properties at a discount that they hope to turn into a profit. Wasatch House Partners, on the other hand, purchase homes that are in better condition with minor wear-and-tear issues at a more competitive price. They’ll send out their own inspectors to your home and most often will deduct the cost of the repairs from your price. Whether you have an Wasatch House Partners arrange for the repairs or you sell “as is,” you’ll avoid the hassles of having to complete the repairs yourself, which can be both time-consuming and costly.
2. You can avoid contingency clauses.
Contingencies run rampant in-house contracts. Contingencies are “back out” clauses that do a lot to protect buyers but are onerous for sellers. The fine print might say something like:
• Offer is only valid if the buyer’s current home sells within three months.
• Offer is only good if the inspection doesn’t turn up a cracked foundation.
• Even if the bank has approved it, the offer is only valid if the mortgage lender comes through.
A contingent real estate deal has anywhere from a 1%-10% of falling out of contract. If you’re selling your home for cash to an investor, this may be an extra obstacle you can avoid depending on the type of buyer you’re working with. Although many cash buyers will still want to have the home inspected, they’re less likely to nickel and dime you on repairs.
3. Financing is pleasantly different.
The reason home sales take forever is that lenders get involved. If you have to borrow money, you’re on their timeline and they don’t really care about your timeline. All-cash purchases close quickly because they don’t have to deal with lenders at all. What’s more, a cash buyer’s offer won’t hinge on the home appraising at a certain amount. Financing is also where home sales tend to fall apart, so selling your home to someone who is buying for cash means you can skip this hiccup.
4. Selling a house for cash is quicker and less legwork.
Because you have someone interested from the beginning, you don’t have to go through all the primping that goes into listing your home for sale. No need to worry about staging or hiring a pro photographer or figuring out your marketing description. Direct buyers take care of the inspection and repair responsibilities for you and you completely bypass the lending steps. You call an investor (or contact one online), they ask you some questions, run some numbers, and they make you offer. You take it or don’t, and you close within a week or two. This can be an especially attractive option in the event that you have to drop everything and sell the house for job relocation or other sudden life change.
5. You could also rent out your house or sell it on the open market with an agent’s assistance.
If you’re weighing the decision of selling your house for cash, consider some of your other options, too. If your home is in decent shape, look at renting it out. You’ll need to hire a property management company or be prepared to do maintenance and repairs yourself, but since rental costs tend to exceed mortgage costs in most cities, a tenant can supplement or completely cover your mortgage payment. You might even try offering a lease-to-own option to tenants. You could also partner up with a top real estate agent in your area who has a good track record for selling homes quickly.
6. Scams happen in the ‘Sell Your House for Cash’ space.
Life events or circumstances such as divorce, foreclosure, bankruptcy or employment transfer all make the option of selling your house to an investor for a quick, no-fuss transaction more attractive. But that doesn’t mean you shouldn’t do your homework. Investors, unlike real estate agents, do not need to be licensed to operate. Though there are many legitimate and legal cash-for-houses companies, it is an industry fraught with scams. Beware. Keep an eye on your credit history to make sure no one has taken out a second mortgage on your home. Be hesitant about any company that charges an application fee upfront. Shady businesses can take your equity and walk away, leaving you in a more desperate position than you were when you started looking into a cash option.
The Benefits of a Cash Buyer
There are so many reasons as to why it can be beneficial to sell to a cash buyer. We’re one of the most tried and trusted buyers around, and you won’t find a more respected site with a quicker turnaround than here. You can have the cash in your bank in seven days, which can be invaluable when you’re facing repossession or need to free up money quickly. By accepting a cash offer, it also avoids the dreaded chain. Yes, a move to your dream home won’t be dampened by problems further down the chain, you’ll receive your money in a matter of days to free up the opportunity to move on to your next property.
Here at Wasatch Home Partners, we aren’t going to change our mind. We’re committed from the moment we make the offer, meaning you’ve absolutely no need to worry about getting the sale over the line. On the other hand, you’re under no obligation to accept our offer and we completely understand if circumstances change. We’re completely flexible here at Wasatch Home Partners and work to suit your needs.
Get a Cash Offer on your Property Today!
We understand some people need to sell their house to loosen up some cash, while others just shudder at the thought of being involved in a chain. We are here to help and will make a cash offer on any property.
Speak to one of our expert team members today and we can value your home and make an offer in a matter of hours, with the whole transaction completed in as few as seven days.