In March 2021, the National Association of Realtors published a study stating that 23% of home buyers (including real estate investors) financed their purchases with cash. Selling your home can be extremely stressful, especially if you are under pressure for it to happen fast. This might be an incentive for you to want to find a cash offer. You may also have reasons to question the traditional way of selling your home, to buyers with a loan, because the property you are looking to sell doesn’t meet the right criteria. Let’s take a look at the benefits of accepting a cash offer VS a loan when selling your home.
Cash: a faster process
In the current market, more and more buyers are opting for cash transactions when purchasing properties. Why? Because buying with cash takes half the time it does when taking out a mortgage. It takes an average of 47 days to close a deal when selling to a traditional mortgage lender, whereas it takes around 2 weeks to sell to a cash buyer. This is appealing to buyers who want to purchase a property fast, but it can probably be equally appealing to sellers who need to get the process over and done with. Efficiency and rapidity are thus one of the great benefits of accepting a cash offer when selling your home.
No need for contingencies
As well as a faster process, a cash offer on your home can also allow you to omit the need for contingencies. Buyers coming forth with a cash offer won’t need the financing contingency or the sale contingency in some cases. Therefore, as a seller, you’ll be less likely to lose the deal over an appraisal contingency. What are the most common types of home-buying contingencies?
- Inspection contingencies give the buyer the right to have the property inspected.
- Financing contingencies give the buyer time to obtain financing for the purchase of the property.
- Appraisal contingencies protect buyers and ensure a property is valued at a specified amount.
Cash offers are more likely to close
Cash offers are faster than traditional mortgage offers, but they can also be safer for sellers. The NAR’s Realtors Confidence Index report states that “issues related to obtaining financing” are the primary reason for the delay or termination of a real estate transaction. You can be confident that the deal will go through when your buyer wants to proceed with a cash offer, because there are no external parameters to the sale, like a third party accepting the loan.
Mortgage buyers are higher bidders
However, though cash offers make for a much faster process than mortgage offers, you may find yourself in a situation where you’re losing out, financially. Two researchers from the Rady School of Management reported that from 1980 to 2017, on average, cash offers were 12% lower than financed offers. You might be leaving money on the table when going for a cash offer.
Spare yourself the stress
Selling your home shouldn’t be a never-ending source of stress for you. No matter what your situation is, whether you are having trouble selling your home because of the condition it is in, or whether you are risking foreclosure, here at WasyHomes, we specialize in buying properties from homeowners. We will take your foreclosed or run-down home off your hands and spare you the stress of making all these decisions and going through the selling process, especially if you have other urgent matters on your hands – our job is to help get you out of the sensitive and difficult situations you may be in with your home. Contact us for more information!