What Does the Process of Selling a House for Cash Look Like?

“Many real estate agents think that selling a house 'for money' means that the buyer will come up with a bag full of money for them, but that is not the case," said Lucas Machado, a property investor and owner of House Heroes, LLC. "'Offerings' means that the grant does not cover financial contingency - in other words, it does not depend on the buyer ability to secure a loan." But that doesn't make the process of selling your house for money less complicated. We are here to guide you step by step so that you can make an informed decision about whether it is right for you. We will talk about all the basics, including: Where to find reliable cash buyers  How to get cash offer and what to do when it comes in Differences and similarities of common list experiences How the experience can vary among cash buyer  What to expect from the escrow and closing  Sign the final forms and withdraw the money Selling a house for cash: How does it work? Buyers of money share a few common features: they do not need lender financing to pay for your house, and they will usually buy your house off the market. That means you will get offers in very few cases (you will not need a mortgage to appease the bank, and also a buyer will not need to sell his or her existing home before getting a loan, for example). Lack of credit reduces a lot of anonymity in your end as a salesperson, and - good news - you can skip stopping and showing off the rigamarole. Buyers of money will vary according to their purpose of purchase, the types of homes they are interested in, and everything they offer to sellers. Investors “Buy and hold” aim to hold the asset for a long time, usually with the intention of renting it out. Home flipper usually buy at a higher discount and plan to upgrade the property before selling it for a profit. iBuyers ("instant buyers") immediately offer homes online. Consumers use automated measurement models (AVMs) and web platforms to provide systematic information to sellers. Depending on the type of investor you end up selling to, the process of obtaining offers and closures will vary, but you can expect to go through these key steps: Find a buyer for the money Below are some of the most common and effective ways of finding the right buyer: Easy sale: The free HomeLight tool for easy sales will match you with a pre-certified buyer who has confirmed that you are buying homes in your area - and who is more like your property based on their past transaction history. It only takes two minutes to find your best match, and there is no obligation to accept offers. Online search: “Buyers of money are usually not investors, and most markets will have at least a handful of them available online,” Machado said. This will require you to do more formal, however. Work with wholesaler: Another way is to work directly with the seller, says Travis Steinemann, a real estate investor and founder of BuyHousesBR.com. He explains: "Traders compare money buyers to sellers, and they often cut a bit." “They value your property, estimate the cost of repairs, and market it to their customer list. You can find them by Googling ‘we buy houses’ following the name of your city. ” Whatver method you use to find potential buyers, be sure to research any prospects and ask for directions from other traders. Get a cash offer and review it If an investor or an iBuyer has offered you a cash offer, how do you know which number is right for you? Checking for donations can be tricky, and there is no formula equal to one size. However, Steinemann says that, if your home is in good condition, you can look at comparable properties that have just been sold in your area at the same size and level of completion, and then issue an agent commission and throw in any discount you feel the benefits are worth. "That will depend on your situation - someone who has been demolished or who owns an empty house can cost more money than someone who wants a bigger house," Steinemann said. On the other hand, if the house is not in good condition, you propose to take a limited number of renovated houses in your area, deduct the cost of getting your house in that condition, deduct a commission, deduct investor profits (usually 15%), and that will come at a reasonable price. Qui recommends asking the following questions when checking an investment offer from an investor: Is the consumer planning to make a significant investment? Does the buyer have a good record of closing the transaction? Is the buyer using a standard contract? If not, is it fair to them if the lawyer reviews the terms of the agreement? According to Steven Herzberg, Miami's real estate attorney who specializes in real estate, there is more to it than just the sale price. "Any promising buyer who sells money should be willing to put a proper initial deposit," he said. "For example, for a house of $ 400,000, the deposit should not be $ 1,000.00 - it should be close to 3% -5% of the purchase price." Herzberg also proposes to request financial proof, which may be a simple bank statement or a letter signed by a bank official, to ensure that the buyer has the funds available to complete the purchase. If you need help deciding how much your property will cost, you can start with our free Home Value Estimator rating, which comes from many sources to create a real home price estimate based on current market trends. Joanne McCoy, a real estate agent in Lincoln, Nebraska, also suggests contacting a reputable agent to help you with comparable market analysis, or perhaps to order your home inspection. "While appraisal differs slightly and is not a complete guarantee, it can be helpful if you have a real problem to identify what the best price would be," he said. "At the end of the day, if you are going to get less money than the market value, you have to decide if the benefits outweigh that amount." Prepare and sign the purchase contract After accepting a cash donation, Mike Qiu, a "fix and flip" investor in a large Seattle area and the owner of Good As Sold Home Buyers, says everything else is very similar to regular home sales. The contract, which is usually adjusted by the buyer, must include the purchase price, deposit amount, and closing date. The seller may choose to sign and accept the offer or to have an attorney review the terms. Some buyers of money will give up home inspections, while others will still choose to get them, and can negotiate a contract price to cover any needed repairs. In some cases, Steinemann points out that, a buyer of money can make a gift of "invisible sight" without checking. "They will do this if they know that their price is so good that anything that is not going well at home is not a problem, or if they are planning to demolish a home and land value is the only thing that matters to them," he explained. Those types of offers close very quickly, in about 7 to 10 days. Because the cash buyer won’t be working with a lender, he or she will likely be deprived of time in the window when the house would need to be technically inspected in the normal sale, and the time it will take for the borrower's loan to pass. Identify any unique requirements As Machado points out, while most financial transactions are fast and direct, sometimes there are self-perpetuating situations that can simplify the process a bit. "For example, if the house is owned by a landlord, the HOA may need 30 days to process a buyer's request," he said. Another aspect of closure is false municipal searches. In some municipalities, he notes, false searches take a few days, and in others it can take three to four weeks. Despite the possible delays, "cash sales will remain faster than conventional funded transactions in the same situation in the same municipality," Machado said. Close on the sale Also, the closure of a cash sale will go much faster than a deal involving a mortgage. "Usually, retailers are ready for a two-week closure," Qiu said. That's much faster than the normal sale closure - according to Ellie Mae, the average time to close a mortgage loan is 45 days. In addition to speed, a flexible schedule is another advantage of the closure. For example, if a seller needs to close before moving on to the next home, an investor or flipper may be more likely to delay acquisition after closing than a traditional buyer would buy. When it comes to real closures, you probably won’t see much difference in traditional sales, unless it’s going to be quick. It may be held by a deeds company, and you will sign the same documents as you would sign on a traditional sale, such as a title deed, a payment statement or any disclosure of property - the issuance of mortgage and financial documents. "The paperwork can be written by a deeds company or a lawyer chosen by the seller - it's up to the seller," Machado said. Benefits to selling a home for cash You’re likely considering the possibility of a cash sale for any number of reasons: You have found your dreams Home and you want to buy it quickly without waiting for your current house to sell in the open market. Your house needs major repairs or repairs that you can or do not want to support. You need to sell immediately to accept relocation or other changes in circumstances. You do not have the time, energy or patience to fix your house, install shows and wait for inspection, inspection, finance and closing procedures. We have spoken to experienced investors and real estate agents to identify some of the most attractive aspects of working with a direct buyer, as well as some of the issues. Quick and guaranteed closure Inside the board, the main drawing of cash sales is speed. "Money buyers can close for a short period of time like a week, when traditional currency can take a month or more," Steinemann said. With a sponsored purchase, there is always the possibility that the agreement may be terminated if the consumer does not receive a loan approval or if the assessment is below the contract price - a long and frustrating process of getting you back to where you are. With money sales, it is usually not a matter of when you will close, but when. A little stress When working with a money buyer, most of the common headaches and uncertainties of the traditional sales process - such as stage setting, demonstration and screening - do not go off the table, which means a simple, very straightforward process. Reduced amount While the value of the investor sales contract will be lower than what you would get from traditional trading, you can save on some of the sponsorship costs. "In retail market sales, most of the transaction costs, such as commissions for both listing agents and buyer's agents and escrow closing costs, fall on the seller," notes Joel Aponte, founder and manager of acquisition with Move On House Buyers. "Also, the retailer is often asked to support consumers with the approval of closing costs, pre-listing and renewal repairs, post-test pre-test adjustments, and extended arrests, all of which may include significant costs." The fastest way to your next home Suppose you find a suitable home that examines everything on your list and is within your price range, but it gets a lot of interest and a lot of offers. As Nebraska real estate agent McCoy puts it, by taking a cash sale of your current home, you will be in a better position to protect your next home, because that seller will not have to wait for any emergency or financial delays. “By getting quick cash sales and closing, you can have better negotiations for the house you want,” he said. Looser standards for the state of the property As Steinemann points out, many government programs that purchase FHA, HUD, and VA loans have strict guidelines that can make it difficult for retailers to sell. "When you work with a buyer, the goods do not have to be in good condition - they can be sold in any condition," he said. Potential drawbacks of a cash sale If all of this sounds too good to be true, it might be on the money side. It is up to you to determine if the benefits are worth the following: Low price When you sell cash, all that speed and convenience comes at a cost: You will usually sacrifice a lump sum in your home, as money buyers often want to pay less than the market price. "Depending on the times and costs of market capture, but retailers can expect to leave the table anywhere between 8% to 15% of what they would have gained through an effective marketing process," Aponte said. At the end of the day, investors are doing business - at a lower rate, for that matter - and they need to make money to keep buying homes. "Investors expect to get a better deal because they are guaranteed and can close quickly," explained Steinemann. “They usually know their numbers and will not buy emotionally, unlike first-time home buyers. Either the numbers are valid or not. ” There is a chance that you can recoup some of the losses at home price, notes Aponte. “Depending on the nature of the home and the amount of repairs and renovations that may need to be calculated on the market value, sometimes the seller is able to come up with sales - not only to reduce stress, but also financially, especially in older homes. ” Potential for fraud The sad reality is that there are always scammers out there, ready to devour homeowners who need to be sold immediately. Before entering into any contract, thoroughly research the company or individual and ask for references to previous vendors. Beware of any buyers who show no interest in seeing your home in person and who only email to you, as that could be a red flag for scams. One of the benefits of going through easy sales is that all of our money buyers are pre-approved and tested before gaining access to our platform. Availability of “lithium and switch” Kevin Kendrick, Orlando's top real estate agent 45% faster than average and a certified iBayer, sometimes sees a fair offer to his sellers, which can be exciting at first - but that offer isn't stoned until the contract is finalized. "A buyer of money can make a promise close to the value of the list, but they often ask for a price adjustment in the test phase," he explained. "Once all is done, the final price can reach 15% below the fair market value." Lack of commitment Qiu warns of money buyers who make donations at very low deposit rates. The amount of money to be invested will vary by location, but he says anything below $ 2,000 in general and less than $ 5,000 in high-value markets ensures that it should be noted. Extra testing time is another red flag. "These are signs that the homeowner is working with a full seller with the intention of selling the contract to a third party instead of buying them, and he can easily deviate from what is being done if it doesn't work," Qiu said. Ready to cash out? The condition of all retailers is unique, but for many, the benefits of a sale can be equal to the given value. If the process of selling a house for money sounds like something you would like to explore, our Simple Sale tool is a solid place to start. Instead of going out and claiming a grant on your own, HomeLight will compare you to a real buyer who buys properties like yours - in terms of price and point of view - and who is guaranteed to buy right now.