You’re in a bit of a financial pickle. Your house is listed and you need to sell it fast, but there’s not a buyer in sight.
Then, all of a sudden, you get a call with a cash offer on your home. Finally, the answer you’ve been waiting for!
Or is it?
You’ve undoubtedly seen those “cash for homes” ads on TV or social media. But how does it work, exactly? Are those companies legitimate? Most importantly, will accepting cash for your home improve your situation—or make it worse?
In this post, we’ll answer those important questions and more. Before you accept any cash offer on your home, read this first.
Cash Offers for Homes: Who Are the Buyers?
It takes the average homeowner 68 days to sell their home. Depending on your circumstances, you may (or may not) be able to wait those 68 days.
“Cash for homes” buyers are also called opportunity investors or equity purchase companies. They’re individuals or companies that target distressed homeowners who need to sell their homes as fast as possible.
Because they have equity on hand, they’re able to bypass financing, inspections, and other aspects of the buying process. This allows these companies to offer cold, hard cash to buy your house—sometimes in as little as 7-14 days.
Cash for Homes: The Pros
So far, it’s sounding like a great deal, right? In some instances, it can be. Here are some reasons why a house buying local company can be a good thing.
Fast Speed
You’re likely to close much faster than you would if you sold your home on the open market. This could be a godsend if you truly can’t wait a few months for a traditional sale.
Less Uncertainty
When you sell your home, there’s always the chance the buyer won’t qualify for a mortgage or will back out at the last minute. Selling your home for cash erases a lot of those uncertainties, as well as the need to pay closing costs or real estate commissions.
“As Is” Is Okay
Does your property need a lot of repairs or renovation work? That won’t matter to a cash buyer, as they’re usually prepared to buy any house “as is.”
Cash for Homes: The Cons
No discussion would be complete without mentioning some potential red flags too. While there are some benefits to selling your house for cash, here are two important drawbacks.
Predatory or Aggressive Tactics
Cash buyers purposely look for sellers who are desperate. They often target people who are recently divorced, widowed, bankrupt, or in foreclosure. Some (but not all) companies will aggressively try to pressure you into making that quick sale.
Much Lower Sale Price
Perhaps the biggest drawback to selling your home for cash is you’re unlikely to get anywhere near its fair market value. Cash buyers know they’ll have a lot of work to do to flip and resell your house, so you can be sure they’ll deduct those estimated costs from the final offer.
Do You Need to Sell Your Home Fast?
So, what’s the takeaway?
If need to sell your home fast and you receive a cash offer, your best bet is to proceed with caution. Make sure you’ve weighed all your options before you make an impulsive (or a desperate) decision.
Did you find this article helpful? Be sure to browse our other Home Advice posts for more great information.