Cash offers are uniquely different from a traditional mortgage-backed offer. Selling your home for cash up front is not like selling through a Realtor where more often than not, the buyer interested in your home is seeking a mortgage and the offer will be close to your asking price.
Cash offers are usually for less than asking price. However, the critical thing to remember is cash offers take less time. Buyers paying cash will often close within a month. There are advantages to selling your home to a cash buyer. To know for sure if the cash offer is a good deal, you need to look into some factors and do your research.
Examine the Local Market
Are homes in your area selling for full market value? Less desirable neighborhoods tend to have homes that sell for less than full market value. They may start at a higher listing price, but after a time, many sellers will give in and accept an offer that is lower than what they had hoped for.
Be Careful of What Prices You are Researching
It’s essential to look further into listing prices. You should do your research and find out what the neighboring properties ended up selling for. The sales price is an important factor.
A reasonable cash offer is a pretty good deal if it is close to the final sale number.
Of course, you need to remember a lot of homeowners work with real estate agents. When working with a Realtor, homeowners pay at least 5% commission based off of the contract sales price. So, with commissions and closing costs, these homeowners netted quite a bit less than the final selling price.
If your market has little to no sales of recent homes, it can be challenging to determine what a fair and reasonable sales price is for your home. In these cases, when you receive a cash offer, there is not much to match up to determine if it is a good deal. Of course, if the homes are just at a standstill on the market, I suppose any cash offer may be appealing at that point.
There are other factors to help you determine if a cash offer is a good deal.
Is it Worth The Wait?
A cash offer is excellent for several reasons, however, the number one reason they are so attractive: the speedy process.
There are no lender conditions to be fulfilled on a cash offer reducing the amount of time it could take significantly. It is not uncommon for buyers obtaining financing to wait upwards of a month on an approved application and mortgage.
Unfortunately, financing buyers can slow down the process, even though sellers often need to move quickly.
Cash buyers will buy properties without a lot of stipulations. Buying your home in an as-is condition can relieve you of necessary repairs and the amount of time it might take to complete those repairs.
Advertising that you are willing to accept cash offers is a great way to get a cash buyer quickly. A lot of cash buyers are not buying your home to occupy them, in many cases they will be fixing them up to sell or, therefore, the condition of your home is not relevant to them.
So, in the end, if you think about the offer in terms of time, you should consider how quickly you need or want to move. How much are you willing to pay to do that?
Maybe the offer is significantly less than what you were hoping for, but you can close in just a few weeks, there is a considerable advantage to this cash offer because it solves your problem of needing a quick closing. For example, if you have code-violations, a lot of repairs and expenses adding up, over time, accepting the offer may be a better outcome than absorbing the costs.
Does the Property Need a Lot Of Work?
Your property may need a lot of repairs or updates so a traditional buyer obtaining financing may not be interested in purchasing it. Besides, some types of loans buyers qualify for do not allow certain repairs to be left undone before the final purchase of the home resulting in the homeowner shelling out the time and cash to complete the repairs. However, typically, financed buyers want a move-in ready home.
Houses in need of repair create complicated situations.
How much money would it cost you if you fixed up your home and did all the repairs necessary? This is something to consider. Is it thousands of dollars? Do you have the money you need in reserve to complete the repairs?
A cash offer from a cash buyer will take into consideration those needed repairs and come in at a price that has those repairs reduced from asking price.
By accepting a cash offer, you don’t need to do those repairs, and you can take the cash and make a profit.
Cash buyers are typically experienced in purchasing properties with cash. They can explain their offers, and you can ask questions as to how they came up with their offer price. If they are professionals, they will be able to breakdown their evaluation for you so you can determine if the offer is fair.
Professional cash buyers can provide you a breakdown of what they need to do to your home so that it is in saleable or liveable condition. They can let you know how much these necessary repairs and updates will cost. These numbers should add up to you after you do your research.
Is it a Rescue?
Your situation may present itself as urgent, and in some cases, then a cash buyer is a rescue mission. Homeowners who have emergencies find that cash buyers are the easiest ways to sell their homes quickly.
When foreclosure is imminent or in the near future, this can be considered a dire situation for a homeowner who needs to move on quickly.
Since foreclosure has a long-lasting effect of at least seven years on your credit report, homeowners do what they can to avoid the foreclosure process; hence, why a cash buyer can be considered a rescue.
In these situations, determining whether an offer is a good deal or not is a little different. In cases of foreclosure, just about any offer is better than the alternative. In reality, it is a win-win situation. The money you get from the sale of your home can pay off your lender and get that burden off of your shoulders.
Saving yourself from foreclosure is generally a great idea. Working with a Massachusetts cash buyer has its advantages. Some professional buyers can work with your lender and get to the perfect sales price where you can pay the property off and not have lasting adverse effects.
Should You Sell for Cash?
In the end, you need to weigh out your pros and cons. If you need to sell quickly, a Massachusetts cash home buyer is often the best answer. Working with a property solutions company is an excellent place to start. The professionals at PavelBuysHouses.com are here to work with you and provide you with a reasonable cash offer as an alternative to any dire situation you may be in. With a quick process and professional services, our team has you covered every step of the way.