In many markets, property values have taken off to levels not seen in well over a decade. It may be a great time to explore selling your home. Depending on the condition of your property, the buyer may be a cash buyer. While this is a typical practice, there are many nuances and slight differences when working with a cash buyer instead of a traditionally financed one.
In this article, Best US Investment, LLC explores the steps to consider when selling your home for cash, as well as some factors to keep in mind when accepting a cash offer. There are many benefits of selling a house for cash, and Best US Investment, LLC is here to help!
The Process of Selling a House for Cash
Selling a house for cash might be a rare circumstance, but you shouldn’t be overwhelmed by the process. Here are the steps for successfully selling a house for cash.
Step 1: Qualify Cash Buyers
The first step in selling your home for cash is finding the RIGHT buyer. Most cash buyers are quick and responsive and are happy to submit a cash offer should you be interested in one. Cash buyers don’t need more than 24 hours to get you an offer. When selling a house for cash, it’s always best to get multiple offers if possible. When ready to decide, remember that price is not the only factor to consider. The right buyer should offer the ideal price, inspection period, timeline, and terms that put you in the best possible position to sell your home for cash.
Questions to Ask Cash Buyers
There are many factors to consider when contemplating a cash offer for your property. Here are some questions you should ask before moving forward in the process.
- Who are they? Take to the internet and do some research on testimonials and any reviews available.
- How long have they been around? Are they local? Try to get a sense of how experienced they are within real estate. The longer a buyer has been investing the more likely they are to close!
- Can I trust them to execute the contract? Accepting an invalid offer not only wastes time and potentially money but deters you from negotiating with buyers who are legitimately qualified.
Step 2: Compare Offer Terms
Most buyers have specific offer terms to consider before moving forward, even when selling a house for cash. Offer terms protect all parties involved and usually consist of these key factors:
- Inspection: An inspection is a negotiating tool for buyers. They are almost always going to give you a list of deficiencies with the property in an attempt to knock something off the price. Understand that there may need to be some give and take at this point. Let the market be your guide on where you can concede and where you can take a hard line. Find inspection period here on the contract!
- Earnest Money Deposit: On every contract, there is a line where an Earnest Money Deposit (EMD). In simple terms, the EMD is a down payment subtracted from the final closing amount. The EMD is a way to gauge the interest of buyers. If the buyer breaks the contract or backs out of the deal without justification, the seller may deserve compensation. Find Earnest Money Deposit amount here on the contract!
- Closing Period: You have options to weigh when considering the closing period. You can either close a designated amount of days after the contract is accepted or a specific day. It depends on your preferred closing time. Here at Best US Investment, LLC, we allow the seller to choose between 9-90 days.
Common Red Flags
Make sure you know every section of your contract before accepting an offer. Take a few minutes and review the most common cash offer red flags that investors may include.
Step 3: Accept an Offer and Open Escrow
When accepting offers, you’ll either sign a hard copy version of the offer or use an online contract signing service like DocuSign to execute the contract. Once you and the buyer have signed, escrow and title companies enter the transaction to help research any questions with title and coordinate communication. If the seller is unsure or has no preference for who helps with escrow/title, the buyers might have contacts. Once the offer is accepted, the transaction timeline begins!
Step 4: Monitor Major Deadlines / Complete Paperwork
Sellers often avoid selling solo because of the paperwork associated with the process. The process is simple with an efficient escrow or Transaction Coordinating Company to help execute these documents. Disclosures are always required when selling your home or a piece of property (realtor or not) and give the buyer a clear picture of exactly what they are buying. Work with a local expert to fill out necessary disclosures for your property.
Step 5: Closing Escrow
There are several documents needed to complete the closing. It is always a good idea to enlist the services of a real estate attorney. Not only will they expedite the closing process, but they offer protection. Even experienced real estate investors are not versed in every contractual scenario. With thousands of dollars of EMD at stake as well as potential litigation, it makes financial sense to spend the money on a good real estate attorney.