Wanting to sell your house for cash can be a big deal for some as you don’t have to deal with lengthy selling processes or other issues related to financing. All this means that you can quickly close the deal and get cash in hand.
If you’re only interested in cash offers for your property, you can get in touch with real estate experts dealing with cash offers. For instance, an expert real estate agent can locate the right cash home buyers in Kansas City for you, so you can sell quickly.
In this article, we will share what cash offer is in real estate, how it works, and why sellers and buyers should consider it.
As the name suggests, a cash offer is an offer made by the buyer to purchase your property entirely for cash.
This means that they don’t have to take a loan from the bank and don’t have to go through the extensive screening process, which determines if they have a sound financial standing and will be able to pay back the loan down the road.
In financing, you also need to get the property that you will be purchasing appraised by a professional appraiser, so the lender can ascertain the true value of the property and make sure they aren’t paying more or lesser than the actual value.
All this can lead to potential problems for both buyer and seller, which can lead to delays in the selling/buying process.
However, with a cash offer, the buyer doesn’t need to take a loan since they are paying with their cash. Therefore, there are no “extra” steps involved in the buying/selling process. They simply pay the amount in cash and become the legal owner of the property.
Since a cash offer is becoming increasingly popular in today’s era, this reduces the lengthy selling process and financing-related issues that can arise during the process. Here is how a cash offer works.
Before the buyer starts a cash-only deal with the seller, they need to accumulate all the cash in one account.
Cash is usually combined through various sources such as employment income, sale of assets, inheritance money, personal savings, or business income.
Having cash in one account helps buyers produce one statement as proof of funds to present in front of the seller.
Although the inspection isn’t required when there’s no financing in the dealing, the buyer may still want to conduct an inspection before making an offer.
This way, they will be at peace that they are putting in the right offer for the house they are willing to purchase. The buyer may adjust the cash offer according to the condition of the property and if any repairs or renovations are required.
Once the buyer has arranged cash and is done with the inspection, they or their real estate agent will make a cash offer by filling out a form in the state where the property is.
They will include the deposit amount while ensuring the offer is legit. They will also attach a copy of their recent bank statement to show the seller proof of funds.
If you, as a seller, are willing to agree to the cash offer, you will be able to accept the offer, which is the next step.
Once you both are agreed on the terms and conditions, and you are also okay with the offer value, you both will sign a contract.
The contract includes all the terms of the sale, the closing date, the purchase price, and other terms and conditions.
Since there is no lender involved who will approve all the aspects of the sale and confirm all the financing-related issues, you will be able to close the deal quickly.
It’s only enough for both the buyer and the seller to be agreed upon all the terms and conditions and sign the contract. This will lead to a quick closing process.
Most sellers think that because they are being paid in cash, the offer might always be lower. However, a real estate agent who is experienced in the area and updated with the market trends will be able to help you get your desired offer, even if it’s cash.
Nevertheless, there’s no doubt that as a seller, you can benefit from cash offers in various ways, as listed below.
Fast closing – It’s the bank that usually gets the property appraised to assess its true value. As there won’t be any financing involved, you won’t have to deal with appraisals and other issues related to it, which can slow down the selling process.
Moreover, instead of taking months to close the deal, with a cash offer, you can close the deal within a week and be done with the process.
Less risk – With no appraisal, you won’t have to worry about increasing or decreasing the listing price or other issues related to it. You also don’t have to fret about the buyer financing falling through. Low risk with a cash offer gives you better assurance.
As a buyer, there’s no doubt that all your cash may be tied up in your one asset, and it may be hard for you to gather a large sum of money. However, looking at the bigger picture, there are a plethora of benefits for buyers with cash offers, as mentioned below.
Faster closing period – If you want to move into a house quickly, a cash offer will make you more attractive in the eyes of the sellers, and you will be able to close the deal much faster. Not to mention, the paperwork and documentation are also reduced with an all-cash purchase.
A credit score doesn’t matter – Whether you have a poor or great credit score, you don’t have to worry about it since it doesn’t matter in an all-cash transaction.
Save money over time – With financing, you have to pay interest on top of all the loan-related payments. On the other hand, a cash purchase doesn’t require any loan, so you don’t have to pay any financing expenses, which saves you a lot of money over time.