The process of selling your home for cash

If you own your home and need to sell it quickly, you may want to get a financing offer. Many buyers offer to pay off homes in full instead of financing the purchase through the traditional mortgage process. Cash offers can be tempting — they close faster and are less likely to fall through — but it’s important to exercise due diligence when dealing with cash buyers. Some can be predatory and offer much less money than you would get in a traditional sale, assuming you are in distress.

Compare the typical home closing time

Once you accept an offer on your home, it will take some time to close the sale and receive payment. If you work with a typical buyer who takes out a loan, it may take a little longer to close. That’s because the lender must check the buyer’s credit and financial status, order an appraisal, and do due diligence to make sure your home is adequate collateral for the loan.

In early 2021, it took an average of 57 days to close on a home loan, according to data from real estate technology firm Eli Mae. Some types of loans, such as FHA or VA, take longer.

In contrast, closing with a cash buyer moves on a much shorter timeline. Funding can sometimes take a few weeks. “The biggest proposition for selling your home for cash is the speed at which it can be done,” says Jeff Shipwash, founder and CEO of Shipwash Properties in Knoxville, Tennessee. “Homes sold for cash can be completed as quickly as the title company can do the paperwork.” It’s complicated, though, so you should definitely work with a real estate attorney to handle the legal details and closing.

Steps to selling your home for cash

If you’re thinking of selling and want to sell your home for cash, there are strategies you and your real estate agent can use to make sure it happens. Follow these eight steps.

1. Determine the value of your home

The first thing you should do when selling your home is find out how much it is worth. If you’re working with a Realtor, you can help with this by conducting a competitive market analysis. This will tell you what similar homes are being listed or sold for nearby. Although it won’t give you an exact price—all homes and situations are different, after all—the information is very helpful in determining the price you should list your home for. A professional appraisal can help you determine the value of your home before you put it on the market.

2. Find a cash buyer

Once you know the value of your home, it’s time to start looking for a buyer. You can put a lot of effort into it – the more effort you put in, the more likely you are to get it for your home. Here are three good places to start.

  • iBuyers iBuyers are online companies that use programs and algorithms to determine the value of your home and automatically offer financing. They usually rent out the house or make small improvements and sell it for a profit. Working with iBuyer is quick and easy, but because they need to make money on their purchases, they are unlikely to offer the best possible value. (Anytime you sell to a broker, someone other than an owner/passenger, you may make less money than you would otherwise.) The iBuyer offering is only as good as an algorithm, which may not include complex knowledge of the area. Market.
  • “We buy houses” companies; You may see ads for people buying houses with cash or “buying ugly houses.” These companies make a profit by flipping houses – that is, by buying them cheaply, fixing them up, and selling them again quickly. If your home is not in good shape and you want to sell it as is, they may be a good choice. But, like iBuyers, these companies don’t pay top dollar for a home. And some are less than legitimate, so be sure to do your research.
  • Realtors When in doubt, ask your professor! Local real estate agents are connected to the local market and know what local buyers are looking for. Ask around, and you’ll likely find a buyer, or multiple buyers, willing to make financial offers on the home. This option can get you the highest price for your home, although it will take more time.

3. Get financial confirmation and review offers

No matter what type of buyer you go with, you’ll want to take the time to evaluate each offer. The price is of course very important, but you should also consider the planned closing time and any contingencies. Don’t forget to get financial proof from people or companies you care about. You’ll want to be especially careful when there’s a lot of money changing hands – make sure the buyer can actually afford to pay and that they’re not real estate scammers. Experienced agents and attorneys can be critical in vetting your buyer.

4. Compare cash availability with home value

Any cash offers you receive, especially from iBuyer or a “we buy houses” company, may be on the downside. It may be less than the home’s fair market value. This is because these buyers expect a discount for paying in cash. And sometimes, that’s enough. If you’re in a hot market, you may be able to make more money with multiple bids, but that’s not for everyone. And don’t forget that, while the closing process for a cash sale is often easier than a cash sale, closing costs don’t go away. Regardless of the type of sale, you can expect to pay the same fees to your agent, title company, and more.

5. Sign the contract

Once you’ve decided to accept an offer, it’s time to start the paperwork. Signing a contract makes the agreement public. Work with your agent and attorney to determine the terms of the sale, including the price and closing time, before signing.

6. Home inspection

Most potential buyers want to inspect the home before closing the deal, to make sure there are no major defects that would cost more to repair. The inspector will inspect the home, foundation, and exterior for any signs of problems or issues. Many offers include an inspection contingency, but even if they don’t, the buyer can still request an inspection. If you’re selling your home as-is, you won’t have to worry about fixing or repairing the home as a result of the inspection. However, like sales often result in lower offers.

7. Clear escrow and title

Before closing the sale, you need to make sure you have clear title to the home and can legally transfer it to the seller. Your attorney can help you make sure everything is as it should be. If you have paid off your loan in the past, make sure your lender is satisfied. Also, the buyer puts money into the scam to show that they are serious about the purchase.

8. Review and sign documents at closing

The final step in the home selling process is the closing. This event is the last line where you will meet with the representatives and lawyers of both parties and finalize the sales documents. As with any closing, there will be a lot of signing, initialization and check writing. Once completed, receive your payment and the home becomes the buyer’s property.

Questions to be asked

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