Buying or selling a house is typically the biggest personal finance decision the average individual will make during their lifetime. So understandably, the process of closing a real estate sale is fairly complex. There are multiple parties involved including the buyer, seller, realtors, lenders, attorneys, title company and escrow company.
You can reduce this complexity substantially by accepting a cash offer on your house. The process is simpler, faster, fewer parties are involved, there’s less paperwork and, since no lender is involved, the risk of the deal falling through due to financing problems is lower. Here are some practical tips on selling your house quickly for cash.
1. Avoid Contracts with Contingency Clauses
Avoid entering a contract containing contingency clauses. The clauses allow sellers and buyers to back out of the deal if certain conditions aren’t met. Generally, contingency clauses will be skewed toward buyers.
Contingences common in property transactions include title defects (such as property liens and ownership disputes), building defects, lender approval of the mortgage application and the buyer’s ability to sell their current home. For sellers, a kick-out contingency clause allows them to continue showing the home and accepting other offers if the transaction isn’t closed within an agreed time frame.
It’s difficult to avoid these contingencies in a broker-managed traditional real estate transaction. You can, however, steer clear of the clauses if you go for a cash buyer.
2. Sell As-Is
Selling your home as-is leads to faster closing, fewer closing costs, and no transaction commissions. You can still work with an agent but even then, selling as-is and in cash gives you more room to negotiate the commission downward or agree on a paid fee.
Fortunately, most as-is transactions do not involve agents and the buyer will work directly with the seller. Selling as-is means you don’t have to get bogged down with time-consuming and expensive home repairs. And contrary to what many would think, you expend much less effort when selling your home as-is than you would if you had to stage and update it.
3. Sell to a Flipper
Flippers buy real estate at a discount, improve it over a short time window and then sell it at a profit quickly. If you don’t want to, cannot afford to or are unable to update, list and stage the property for a conventional sale and if you do not mind accepting a lower amount than the market rate, then a house flipper may be just the buyer you need to sell your house fast in cash.
The reasons for approaching flippers are diverse. A layoff, job transfer, foreclosure, extensive damage to the property, inability to pay for a remodel and failure to qualify for a home loan. You have to tread cautiously through when dealing with flippers since they will aggressively pursue rock bottom bargains. Ensure you evaluate all your options, do your homework and assess the house flipper’s credibility before you commit to the sale.
4. Sell to a Company
This might not really be the fastest way to sell your home since companies tend to have significant bureaucracy a transaction has to go through before final approval. Nevertheless, finding a company that you can sell your house for cash is one of the surest ways of locating a buyer who has no problems paying in cash (source ISoldMyHouse.com) .
Businesses will sometimes buy a home either to convert it into an office or to serve as a place to stay when their staff from out of town or out of the country are around. Success here greatly hinges on your ability to package the house as a viable investment for the business. You can start by looking at any advertisements by companies looking to buy a house in the area. If that doesn’t yield results, shortlist medium and large businesses in the vicinity then approach them offering your home for sale.
Note that selling your house in cash isn’t literal. Settling a real estate deal with actual cash is illegal in the US. Rather, cash here implies someone buying the property outright without depending on a lender. Once the terms are agreed on, they’ll issue a cashier’s check or transfer the funds electronically.