If you need to sell your house, you may be looking into your options. Most people know that a cash sale is much faster, but you may have some questions about the process. We want you to make the best decision for your situation, so we put together a list of some of the most commonly asked questions about a cash sale. Read on to find out more about how to sell a house for cash in this blog brought to you by the Brilliant Day Homes Team!
How do you sell a house for cash?
You need to advertise you want to sell for cash. Anyone could buy your house for cash, but not everyone can.
So how do you let people know you want to sell your house for cash? If you are planning to list your property with a realtor, make sure to tell them you are wanting to sell for cash. The agent will then state that you are only going to take cash. They can add a line in the listing description that says they cash only sale. An agent may not want to do this, as they know it will greatly reduce the number of potential buyers.
An alternative to listing and asking for cash is to request a cash offer from a quality home buying company. Homebuyers buy houses for cash and can make things easy.
Regardless of who you sell to, we recommend always asking for proof of funds for a cash offer.
What happens when you sell a house for cash?
If you want to sell a house for cash and you are using an agent, you will follow a similar path as the traditional selling route. The easiest way to describe selling a house for cash is that it takes the same road as normally selling, but you can shortcut some of the processes that are required whenever you get a loan.
The biggest difference is that when selling in cash, financing isn’t a drawn-out process. Banks have many processes and procedures they do known as mortgage underwriting. Here the bank looks at everything about the buyer’s finances and the house. When someone buys your house using their own cash, they don’t have to jump through the hoops the bank requires.
How long does a cash sale on a house take?
The traditional selling process takes 3-6 months on average when a buyer isn’t paying cash. If are listing with an agent, someone with a cash offer can save you about a month. If you are selling to a home buyer, you can sell your house in less than a month.
The longest part of selling is a house is usually waiting on the bank. If you are paying cash, you cut out the bank altogether. The wait will now be with the title company to make sure that the title doesn’t have any issues. If the title is clean, most title companies will require about a week.
Traditional Sales Process
Preparation (30 Days+)
- Make repairs
- Clean up
- Start Showings and open houses
On Market (66 Days)
- Sign contract
- Start the option period (10-14 days)
- Have the inspection
- Negotiation of additional repairs, or price reduction
- Possible extension of option period to continue negotiations
Time To Close (35 Days)
- Buyer waits for bank underwriting to finish
- Appraisal comes in
- Negotiations if the appraisal is too low
- Buyer may be waiting on their house to sell
- Possible extension on the closing date
- Close and sell
Selling To A Home Buyer For Cash
Preparation (0 days)
On Market (0 days)
Time To Close (~14 days)
- Sign contract
- Title Company clears title
- Close and sell
*Keep in mind, if you have title issues such as liens, bankruptcy, or the house is going through probate, this will take additional time to process.
Are there closing costs with a cash sale?
If you have listed your house with an agent, even if you are getting a cash offer, you should expect to be paying the closing costs. Paying closing costs is just part of the process when you sell your house. Typical closing costs average 2% but have a range of 2-5% not including agent commissions.
This is different if you are selling to a home buying company for cash. One of the advantages of selling to a home buyer is that you aren’t going to need to pay the normal closing costs. You would still be responsible for any property taxes you owe, or any liens or debts against the property.
Will I get less money taking a cash offer?
In general, if a buyer is willing to put up cash to make things fast and easy for a seller, they will expect a discount. The actual amount will vary from case to case. However, property holding costs (mortgage, insurance, utilities, taxes, etc.) should also be taken into consideration. Here, if you can save 6 months or more of a house sitting on the market you are already saving thousands of dollars in holding costs.
Is selling a house for cash a good idea?
A cash offer is stronger than financing because the bank is not in control of the buyer. There are a lot of ways that someone that is getting a bank loan could have to back out of the deal, for example:
- If the appraisal comes in too low
- If the buyer couldn’t sell their own house
- If the house needs too many repairs
Selling for cash gives you the peace of mind that the buyer has the money to come through, and not have to back out. You also are able to sell the house as-is, and not have to do the repairs. If you are looking for a cash buyer, reach out to us, we would love to make you an offer.