By Steve McLinden
There are many upsides and very few downsides.
Tops in the “pro” column are speed of sale and convenience. Once you accept a cash offer, you can often get your money in days. For folks facing a relocation, foreclosure or bankruptcy, this can be a life saver.
Fewer sales fall through
A cash sale also removes the all-too-familiar drill of accepting an offer only to lose the buyers at the last minute when they can’t qualify for a loan. Once the cash is passed along, there’s no backing out or last-second cold feet. Such cash sales typically close in 1 to 3 weeks compared to about 4 to 7 weeks on a conventional sale. Also, cash sales are typically “as is,” so there’s usually no major repainting and repairs needed.
Cash is king in a real estate deal … You’ll probably get a little less money out of the house, but you can avoid costly repairs and other complications.
Get professional advice
Though I can’t advocate skipping professional representation in a house sale unless you really know what you’re doing, there are admittedly fewer possible repercussions in a sell-by-owner cash deal. However, if you don’t hire an agent, it will be up to you to adequately price your home to keep bottom-feeding cash buyers/investors from swooping in for significantly less.
Hence, I’d at least advise you to get an appraisal and perform a little additional homework of your own. Look at the various listing services for comparative pricing and price adjustment records on similar area homes and time-on-the-market stats to get a better idea of what the market is bearing. While the appraiser will probably do at least 3 such comps — based on recent sales — a broader data search can further enlighten you.
I might point out that there are quick-sale real estate agents out there who will help with paperwork and do the brunt of their work by telephone and email to speed things up for you. They charge either a flat fee or a smaller-than-standard percentage commission. Since their job is to sell fast, however, they may suggest a listing price thousands of dollars lower than what you could get in the conventional loan market.
When you do line up that cash buyer, you’ll want proof of funds from the party before you agree to anything. By the way, cash-paying buyers who still want to add contingencies for appraisal, inspection and the like don’t warrant a great discount and sort of defeat the purpose of a cash sale.
Because many cash buyers intend to repair and resell such properties, you might be able to cut a short-term lease-back deal to remain in the home if that’s suitable for you and give the new owner an income stream while he or she tends to repairs or other projects.