Have you heard the expression cash is king? It means that having cash in hand is better than having a promise for future payment. Would you rather be paid today or tomorrow?
The process of selling a house for cash is easy. Really, it is. If you’re considering selling your house for cash, read on.
Does a cash sale mean you get a briefcase of cash the day you close the deal? No. The use of the word cash, in this case, means that the buyer doesn’t need a mortgage to buy your house. Upon closing the deal, you will receive payment by check or wire transfer.
When your priorities are speed and convenience, seeking a cash offer for your house might be the right way to go.
Benefits of Selling Your Home for Cash
Real estate laws vary from state to state and cash buyers will have their own way of doing things. Generally, you can expect the following with a cash offer for your house:
- No appraisals = no delays
- No contingencies = no delays
- As-is – no repairs = no delays
- No commission to realtors = more money
- No closing costs = more money in your pocket
- No showings = no cleaning or staging or strangers in your house
- No inspections = no delays
- No banks = no delays
- Faster and simpler process
- Buyer doesn’t need a mortgage
- Buyer takes care of legal documents and filings
The one disadvantage to selling your home for cash is that you may not get the full value of your house.
What are the basics steps in the process of selling your house for cash?
Let’s take a more in-depth look at what the process looks like when you sell your house for cash.
Research Comparable House Sale Prices in Your Market
If you were using a real estate agent, this agent would present you with a comparative market analysis or comp. A comp shows you what similar properties in your market have recently sold for.
You can compare your house to others with similar age, condition, square footage, number of bedrooms and bathrooms, amenities, neighborhood. A site like Zillow can you help find comps.
A cash buyer will not pay the market comp price but it is a helpful starting point for you, the seller, to negotiate.
Research Potential Cash Buyers
Conduct an online search using Google or Craigslist with search terms like cash for houses, sell my house fast, sell my house for cash. Be sure to search in your market.
If you are in the New York City or Long Island area, search for cash buyers in that market.
Make Inquiries with Your Preferred Cash Buyers
When you make contact with the buyers who will make a cash offer for your house, be prepared with a list of questions. Some examples are:
- Have you recently purchased houses in my neighborhood or city?
- Can you provide proof that you have the cash on hand to pay me?
- Can you close in 7 to 30 days?
- What types of property do you pay cash for?
- What is your process for buying a house for cash?
- How do you determine the cash offer for a house?
Cash Buyer Assesses Your Property
You will provide your street address over the phone or through a form on a website. Then the cash buyer typically asks questions about your house so they can do a quick market analysis.
The buyer may make an offer over the phone with the understanding that they will visit your house to verify the details you have provided. Some cash buyers will make an offer after they have walked through your house.
Cash Buyer Makes an Offer
Unlike the traditional buying process, where buyers consult with their agents to make an offer, a typical cash buyer will make you a cash offer for your house as soon as they’ve completed their assessment.
Seller Approves Offer
You can accept or reject the cash buyer’s offer. You are not obligated to accept the offer.
Seller Chooses Closing Date
If you need to close the sale fast, this part of the process is a huge benefit.
Sign Purchase and Sale Agreement
You may have heard of the phrase under contract from friends or family who have sold their house. This is a contract that simply means that you plan to sell your house to the buyer and the buyer plans to buy the house from you.
Get proof that the buyer has the cash to pay you as promised
You can request that the buyer verify their ability to pay the amount of cash promised.
Buyer Arranges for a Title and Escrow Company
Many cash buyers take care of all the documents required to close the deal. This means hiring a title company who verifies that you have the right to sell the property. An escrow company will also be hired to manage all the closing paperwork and arranging for the cash payment to you.
Remember that you can’t sell your house if there are any liens against it. Liens can be put on your house for a lot of different reasons. Some common reasons are unpaid taxes, unpaid child support, or not paying a contractor who has done work for you.
Buyer and Seller Sign Closing Documents
The buyer will tell you everything that you need on the day of signing, including a government-issued ID and the house keys. If you owe any outstanding taxes, utilities or liens you will have been instructed to bring a cashier check to cover these costs.
The documents you can expect to see at the signing when you sell your house for cash:
- Final Closing Instructions are just what they sound like – a list of all the things the escrow company needs to do as well as a list of the amounts of money changing hands.
- Statement of Information is a document where you verify that you are who you say you are.
- Mechanics Liens is the document where you promise there are no outstanding liens on your house.
- Mortgage Loan Payoff document shows how much you owe (if anything) on your mortgage. The escrow company takes care of paying off your mortgage lender.
- Certificate of Title is the document where you promise that you have the right to sell the house
- Title Deed is the document that transfers ownership from you to the cash buyer
- HUD-1 Settlement Statement lists the sales price, tax, utility bills and anything else that you and the buyer have negotiated. This document is required by federal law.
What’s Your Next Step?
If speed and convenience are your priorities, and you accept that you may get less than the market value for your house, then consider a cash offer for your house.
Learn how easy the process of selling your house for cash is. You’ve got an important decision to make and talking to a professional is the first step.