Selling a property is a stressful and time-consuming undertaking. It’s no wonder sellers look for alternative options to selling their property – and one of these options is selling to a cash house buyer.
Putting your house on the market yourself – without a real estate agent’s assistance – is a popular trend nowadays among home sellers.
If you don’t want to hire a real estate agent, you can sell your home to a cash house buyer company or those “we buy houses for cash” organizations.
How Does Selling to a Cash House Buyer Work?
Legitimate cash home buyers can complete a sale anywhere between 7 and 30 days – and this is without using a real estate agent or doing a lot of company viewings.
First, they will need to perform an assessment of your property for sale. These steps allow a cash home buyer to determine how much value your property has. They will be looking at important factors such as your property’s overall condition, the location, and how much it is currently valued on the market.
They will also look at the development potentials of your property. If your property offers possibilities of extensions, renovations, or upgrades, then a cash house buyer is more likely make a higher offer.
Some cash buyers can do this step without personally visiting your property. There are mapping software available to complete this step. On top of that, they can access public information about your property. Of course, there are still some buyers who need to do an in-house evaluation and inspection.
Either way, remember that no legitimate cash home buying company will ever ask you to pay for a survey of your home for sale.
They will also never try to rope you into an option agreement that prevents you from selling your home by other means or to another individual.
Untrustworthy and shady home buying organizations will try to lock you into a sketchy option contract and leave you out of pocket.
It’s essential for you to know the difference between a professional and reputable cash house buyer and disreputable firms.
Understandably, there’s some doubt surrounding the whole “selling your house” for cash option, especially because there are individuals out there who don’t really have the cash to buy a property; they are only out to exploit vulnerable homeowners financially.
Questions to Ask a Cash House Buyer
Before selling your house to a cash buyer, remember to ask the following questions.
Do you have the money available to the amount you’re offering to buy my house?
It’s imperative for you to make sure that any cash house buyer has immediate access to the amount they’re offering. Ask for proofs of financial statements, whether in the form of a solicitor’s letter or a bank statement.
Do you buy properties for yourself?
This question will let you understand whether the buyer is doing this for their own or for third parties. If you are ever asked to sign an option agreement, be wary. Typically, those without the full cash on hand will try to lock you in this type of agreement.
Fast and Guaranteed Sale
Cash house buyers offer a fast and guaranteed sale. Some people find themselves in a situation where they need to sell their property quickly – whether it’s because they need to relocate for work, they need to release some equity, or they’ve inherited a distressed property.
While this may make them accept a lower offer for the property in exchange for a speedy process, the bottom line is they can get money fast.
The important thing to note is to be prepared.
Do your research before selling to cash house buyer companies. If you properly vet them, they could provide a viable option for you.
Mistakes to Avoid When Transacting with a Cash Home Buyer
As you are probably aware, putting a house on the market and dealing with prospective buyers can get time-consuming, stressful, and overall challenging. This fact is especially true if you’ve never been through this process before.
There are instances where it may feel like a grave invasion of your privacy. On top of this, you may feel upset and slighted if you get offers that are less than what you think your property is worth. Those are all too common when selling a house.
While there are significant advantages to selling your property cash, there are, unfortunately, some who take advantage of this so they can scam people. There are legitimate buyers out there who are willing to with cash.
However, it helps to know what to avoid so you wouldn’t fall victim to scammers.
The money should only come from the buyer.
At no point should you need to pay anything to a cash buyer. The funds only need to come from the buyer, not the other way around.
Honest and legitimate cash buyers do not charge anything – whether it’s for evaluating your house, submitting a written offer, or any other type of transaction during the sale.
If a cash home buying company or an individual tells you to have, they have processing, administrative, or contract fees, or if they ask for money for whatever reason, bid them goodbye and don’t entertain them anymore. That’s a classic modus operandi.
Make sure you get a solid contract that details the protection you get.
When reviewing a contract – particularly for your home’s sale, make sure it doesn’t leave any loopholes that will leave you with financial implications.
Ask your trusted family members and friends to read through the contract. Better yet, ask someone with a good knowledge of real estate laws.
The cash house buyer must be prepared to give an earnest down payment.
Legitimate homebuyers are willing to put down a non-refundable down payment of at least 1% of the sales price. This earnest money is the financial guarantee that the property’s seller will follow through with their end of the agreement.
When a buyer doesn’t make it to the option period or doesn’t decide to close on the home according to the terms of the contract, the earnest money is considered payment to the “damages” and inconvenience to the seller of the property.
If the buyer is not willing to put down this type of payment, it’s most likely they don’t have the funds to actually pay cash for your property. That’s a clear indication that you should run the other direction.
Your buyer should not offer an exaggerated sales price.
If it’s too good to be true, it probably is. Be wary of sales prices that are too high. You should be particularly concerned if the prospective cash buyer is resisting to give you earnest money.
In some cases, dishonest buyers will just tell you whatever price they know you’re expecting to hear to get you to sign an agreement with them. This contract, once you sign it, will prohibit you from selling your property to anyone else.
Once they get locked in a contract, their standard operating procedure is to lower their offer significantly. While you are free to decline the offer, think of all the time, money, and effort wasted when you get locked in a shady transaction like that.
The buyer can bale on you and waste your time without any legal repercussions on their part. You are left with your valuable time wasted.
Honest cash buyers don’t use any high-pressure or devious sales tactics.
This is quite obvious advice. However, many sellers don’t even realize the buyer is pressuring them until they give in to their demands.
Honest and legitimate buyers will not pressure or scare you into signing a contract with them. Honest ones are willing to be vetted. In fact, they even encourage you themselves to do the proper vetting.
They are all about win-win situations – for both parties.
Always ask for proof of funds.
This is one of the best practices you should do when transacting with homebuyers. Proof of funds is the term to classify any authentication or confirmation of where the funds come from. These can be in the form of salaries, bank statements (with dates), or proof from money lenders.
While checking these documentations, it’s important to distinguish if they were falsified or altered.
Make sure you reach someone who can verify the information written on the proof of funds submitted to you.
Ultimately, you want to be sure that your cash buyer does have the cash to pay for your home.
Key Takeaway When Dealing with Cash House Buyers
Aside from these critical questions to a ask a cash house buyer, make sure to get a written confirmation of the cash amount they are offering. If possible, include a written guarantee that they will not lower the offer on a whim.
A professional cash buying company will neve ask for any fees – whether it’s for a property evaluation or house repairs. If they do, find another buyer.
As if we’ve pointed out above, there are also some important things to remember when transacting with a cash house buyer. Use your best judgment and be rational.