THE ULTIMATE GUIDE TO SELLING YOUR HOME FOR CASH
As more companies give cash offers for houses and improve the experience for sellers, the idea of getting your money faster is appealing to many people.
Cash sales can be attractive to people going through life transitions, such as divorce, a job change, or a low bank account.
You make a few simple phone calls and answer some online questions to get a cash offer—no more worrying about commissions, repairs, and closing costs.
Homeowners who are ready to sell but can't wait for a buyer to come knocking often consider selling their homes for cash. Selling your home this way means paying a company for the chance to buy your home — sometimes referred to as an all-cash deal.
Curious about the process but unsure whether it's right for you? We're here with answers to some of the most common questions.
WHAT IS A CASH OFFER AND HOW DOES IT WORK?
That's what we're here to explain. If you want to sell your house one of the best options is selling your house for cash.
You don't have to deal with a bank or mortgage company. Instead, you can sell your house directly to a buyer and immediately get the money you need.
When people think of selling their house, they often think of working with a real estate agent or visiting a mortgage company. Selling your house for cash can be a great alternative to all that hassle.
In real estate, selling a house for cash works like this:
Request an offer.
You can skip the asking price (also referred to as "asking" or "staging") and go straight to negotiating by asking for an offer that you're willing to accept. You can negotiate whether you'll sell the house "as is" (will not make repairs) or make any repairs.
The cash buyer will evaluate your home.
The buyer will send a representative to the property, who will thoroughly evaluate the property's condition. Then, the buyer will make an offer.
Review the contract.
When you receive a buyer's offer, you review the contract price and terms, then decide whether or not to move forward.
Ask for proof of funds.
To protect yourself, ask for references or other proof of identity and make sure the person or company has enough money to cover the cost of the transaction.
Clear title
A cash buyer will require a title search to ensure that the property you have for sale is free and clear of any claims or judgments against it, such as mechanic's liens and unpaid taxes.
You get cash!
Don't expect a CEO in a limo to drive up and hand you a briefcase full of hundreds. That doesn't happen. There are still legal steps to take, and a title defect might cause complications. But you can usually coordinate a more effortless and faster sale when buyers don't have to wait for their lender to underwrite or process the loan.
ARE CASH-FOR-HOME COMPANIES LEGIT?
Long answer: Yes, there are many good, reputable cash home buyers, but you need to research any buyer before signing a contract or handing over your keys.
CHECK A BUSINESS'S BBB RATING BEFORE SIGNING A CONTRACT.
Ensure the home-buying process goes as smoothly and hassle-free as possible; ensure the real estate company is accredited through the Better Business Bureau (BBB). Reviews from other customers can help you find a BBB-accredited buyer.
WHEN READY TO BUY A HOME, ASK THE BUYER FOR PROOF OF FUNDS AND AN EARNEST MONEY DEPOSIT.
When selling a home for cash, you should ask purchasers to prove they have the funds to pay you and that they can put down at least 2-3% of the price of the home in earnest money, which a neutral third party will hold until closing.
WHO WILL PURCHASE YOUR HOME FOR CASH?
Cash buyers—or house buying companies—are house buyers who don't use bank loans to buy properties. They typically pay sellers in lump-sum payments, completing their purchases all at once. Selling your home to a cash buyer can allow you to skip the home-selling hassles and arrange a more flexible closing timeline. But not all cash buyers employ precisely the same business model. Here are a few of the different models that may apply to the type of buyers you're considering.
CASH OFFER COMPANIES, SUCH AS MIDWEST CASH OFFER
Midwest Cash Offer can buy your home quickly and for a fair price. Tell us about your home and when you'd like to sell, and we'll provide you with a complete cash offer in as little as 24 hours. After that, you can close in as little as ten days and be on your way.
IBUYERS
Opendoor, Offerpad, and Redfin Now are iBuyers. These companies use automated valuation models (AVMs) to make offers on homes in good condition. iBuyers charge a service fee of around 5%. They focus on buying a high volume of homes through automation and streamlining operations to keep costs down.
INVESTORS WHO BUY & HOLD
Buy-and-hold investors purchase homes to rent out. At times, buyers who purchased a property at a low price will sell once it accumulates enough value. On the other hand, some individuals prefer to keep their properties as long as possible.
Within the real estate investment area, some Individual investors generate passive income by buying and renting out properties. Institutional investors purchase a portfolio of properties each year and manage them with the help of an outside property management company.
PEOPLE WHO FLIP HOUSES
Flippers purchase homes, often in poor condition and at a discount. They renovate them to sell at a profit. While the ultimate goal is to fix up the home and find a buyer quickly, the property doesn't always sell as fast as they would prefer.
WHY WOULD YOU SELL YOUR HOUSE FOR CASH?
It's simple. Many sellers want or need to sell their homes faster. They also may prefer the convenient simplicity of the transaction. Or they are in a difficult situation and need help quickly, in which case the current process of finding a buyer through a real estate agent is not fast enough. Cash offers give sellers confidence and certainty, all while quickly meeting their financial goals and needs.
MOVING FOR A JOB
If your new employer has given you a start date and the company is paying for the move, you need to sell your home quickly. A buyer who needs financing can't make any guarantees about when their lender will give them final approval. If the buyer runs into challenges with their loan, they can pull out of the deal or delay closing.
If you have an all-cash buyer, they can close on your house as soon as possible after the inspection and appraisal are complete. Since they don't need financing, there are no challenges that could cause delays or derail the entire deal.
YOU'D RATHER NOT GO THROUGH WITH THE RISK OF A LOW APPRAISAL.
If the seller agrees to let you buy their home with cash, you have the upper hand when it comes time to negotiate the sales price. If the seller decides to sell their home through a real estate agent and put it on the market, they may receive multiple offers. And if you're competing with other buyers who have financing, they may not be willing to lose out on a potential sale just because you were offered more cash. However, if you get offered more cash and no other offers, you can rest easy knowing that you're getting a good deal on your new home.
YOU DON'T WANT TO MANAGE OR PAY FOR HOME REPAIRS AND HAVE NO DESIRE TO DEAL WITH CONTRACTORS.
Sometimes you need to sell your property quickly and don't have time to make the repairs needed or make it "show ready." These types of repairs and improvements can be costly and time-consuming. You may not even have time to clean it out, remove junk, or fix broken things.
OFFERS WITH TOO MANY CONTINGENCIES MAKE YOU NERVOUS.
When you receive an offer on your home, it's easy to get excited. But it would help if you also were cautious because many different contingencies can pop up in an offer. It's important to consider what the contingencies mean and how they affect you as the seller.
Some contingencies are understandable. For example, if a buyer is purchasing a home for cash and then getting a mortgage, it's reasonable for them to include a financing contingency that allows them to back out of the deal if they cannot secure financing. Another common contingency allows buyers to back out of a purchase if their home inspection uncovers problems with the house.
There's nothing wrong with these contingencies on their own, but when too many of them are unreasonable, that can be a problem. For example, many buyers want to include an appraisal contingency in their offer. If their lender appraises the home for less than their offer price, they have the right to back out of the deal or renegotiate the purchase price. You don't want a buyer who might expect you to lower your price just because they can't secure a loan at sufficient value.
YOUR RENTAL PROPERTY NEEDS TOO MANY REPAIRS OR HAS UNRULY TENANTS.
Rental properties are popular because they are great opportunities to build your equity. Still, they can also cause you headaches — especially if they are tied up in the probate process, vacant, or occupied by problem tenants. If you find yourself in this situation and want to get rid of your property while avoiding the costs and time commitment of listing it, we can help.
IT WOULD HELP IF YOU SOLD YOUR HOME FAST.
If you need to sell your house quickly for cash, it's often best to skip traditional home-buying channels altogether. When you go through real estate agents and the MLS, you can wait months before finding a buyer — especially when you factor in closing times. And it isn't uncommon for buyers to back out of their offers at the last minute, which means you could waste even more time and money starting from scratch. Whether you've inherited a house, are going through a divorce, have financial difficulties, or need to pay off your mortgage, a cash offer may be the fastest and most convenient solution.
FINANCIAL DIFFICULTY
Need cash for a down payment? No funds to make necessary repairs? On the brink of foreclosure? Want to get out of debt?
Selling your home for cash can help you do all these things. Selling to a buyer who will give you cash for your home means that you can get the money you need in a matter of days, not months—because when someone is buying your house for cash, you don't have to worry about whether or not their mortgage will be approved
HOW CAN A CASH BUYER HELP?
If you're a homeowner looking to sell your property, you might be thinking, "Time to find a realtor!" But have you ever wondered what the benefits are of finding a buyer who pays cash for your home? Here are some of the main benefits you can expect.
FASTER CLOSING
A cash offer means you can sell your property quickly. No appraisal is required, and the transaction does not rely on a lender's timeline or conditions.
FLEXIBLE MOVE-OUT
Want to move out next week? No problem. Need to stay put for a couple of months? We can make that happen. Either way, you'll have plenty of wiggle room with a cash sale: no waiting on a third party to approve things like a loan or appraisal. So if you're looking for flexibility, look no further than a cash sale!
LOWER-MAINTENANCE SALE
Selling your h to a cash buyer is lower maintenance than other methods. The whole process will be much more convenient for you, too. You only need to do as much work as you want for a cash sale. Traditional buyers will likely have a general idea of how they want your home to look.
LOWER EXPENSES
Selling your house to a cash buyer is an easy way to avoid all of the usual expenses of a sale—repairs, curb appeal projects, staging, and commissions.
ARE THERE DOWNSIDES TO SELLING YOUR HOME FOR CASH?
For many people, the biggest allure of selling a home for cash is that it's fast—and can be hassle-free. But it's important to know that there are drawbacks to this kind of sale, too. Let's look at some of the reasons why you might not want to sell to a buyer who will offer you cash for your house:
YOU MAY BE OFFERED A LOWER PRICE THAN YOU WANT
Homebuyers who pay cash in total upfront usually want a discount because they don't have to worry about pre-approved loans or appraisals. In some cases, the discount can be as much as 20%. So if you're selling a home worth $300,000, the buyer may offer you $240,000 cash in total upfront.
Cash buyers are typically looking for a deal because they might be buying the property to flip or rent out. This means they'll try to offer you a price that will allow them to cover their costs and turn a profit when they sell it themselves.
IT'S A BUSINESS TRANSACTION.
Cash buyers are not looking for their next home. It is a simple business transaction, so the emotional element typically involved with negotiations is removed from the process. Which, in some cases, might be what you are looking for in the deal.
HOW MUCH DO CASH BUYERS PAY?
In general, cash buyers pay less for a home than other buyers because they don't have to get a loan and can therefore avoid a lot of the fees that come with getting one. Cash buyers can also make an offer on the house more quickly than other buyers.
If you're buying with cash, you don't have to worry about your credit score or whether your lender will approve your loan. There's also no appraisal process, which can take time and money. This means that cash buyers often get homes faster and at lower prices than other buyers.
A recent study by Zillow shows the median sale price for homes bought by cash buyers was $218,000 in 2018—that's 25% less than homes bought with loans! The study also shows that 52% of homes were purchased using cash last year, but this number varies widely across different parts of the country: in some cities like New York City or San Francisco (where prices are high), only about 20% of all sales were done using cash.
HOW LONG DOES IT TAKE FOR A CASH BUYER TO CLOSE?
In general, the timeline for a cash buyer to close is much shorter than that of a mortgage loan buyer.
A cash buyer does not need to go through the same financial vetting process as someone who needs to take out a home loan. Because of this, the path to closing is generally much shorter for cash buyers.
For example, if you buy a home with a mortgage and need to get your home inspected and appraised before closing, you might face delays if you discover problems during those processes. On the other hand, a cash buyer can close these deals in nine days.
IS SELLING FOR CASH A SMART MOVE?
If you're looking to sell your house, you know it's not always easy to find the right buyer. You might have had a few people look at it and think about making an offer, but then they decided that they needed to wait a little longer. Maybe they want to give their kids a few more years in the neighborhood school before moving. Or maybe they're just not ready for all the work with homeownership.
With a guaranteed cash offer by Midwest Cash Offer, you'll quickly get the cash you need—no strings attached. We bring our cash to buy your home—no bank loans, no hassles. And we take care of all the closing paperwork and fees, so you don't have to worry about it. We'll even schedule an appointment with one of our team members at a convenient time for you—and if you're not ready to talk when we show up, no problem! They'll leave their card and set another appointment when convenient for you.
