Selling your house for cash will result in a faster closing than it would with a buyer who must obtain financing. That’s the bottom line, but the rest of the story includes knowing how to pay for the purchase, as well as what the closing process involves. BenBuysIndyHouses.com provides tips on selling a house for cash.
Ben Buys Indy houses notes that a seller is more likely to accept an all-cash offer, even when facing a higher offer from a buyer who needs to obtain financing. This is due to the fact that the offer from the buyer who needs to obtain financing will generally take longer and it can result in the sale falling through.
Selling Your House For Cash- What Makes the Process Faster?
There are several factors that add to the efficiency of a cash sale, some of the most important points include:
No need for an appraisal:
Buyers who are obtaining financing from a bank or mortgage company will need to have an appraisal performed on the home before providing the funds. That’s because they aren’t going to pay for property that isn’t worth the money they may need to get out of it, should you default on your loan.
When the buyer is paying cash, the need for an appraisal becomes non-existent.
No loan qualifications:
Your buyer may be fully qualified to buy your home, but a multitude of issues can arise before the closing that will make the buyer unqualified. Perhaps the buyer purchased a new car or expensive toy before the house closed – this is a common issue for many homebuyers. Or maybe the funds from the institution are no longer available.
With a cash buyer, these types of headaches are not going to take place.
Quicker closing process:
We all know that when a buyer has to obtain financing, the bank or institution doesn’t just hand over a check. It’s going to take up to 50 days to close, due to the loan company checking the buyer’s qualifications, requiring a home inspection on their investment, as well as other contingencies required by the institution.
A buyer who is paying cash doesn’t need to jump through hoops, other than having a certified check drafted. If the buyer is willing to sign a lead paint waiver, the closing can be completed as early as one week. Check out this video regarding what a seller has to say about selling their home fast and for cash.
Homeclosing101.org can provide more ideas of what you can expect upon closing a home sale.
Selling Your House for Cash Basics
When selling your house for cash, BenBuysIndyHouses.com suggests making sure you take care of four essential avenues of the sale.
1. Have a Sales Contract: Don’t skip this step, no matter who you are selling to. The American Bar Association provides information on what the contract should entail. The contract protects you, as well as the buyer and should outline the property description, the sales price, who is buying and who is selling the property, as well as what is included with the property. You should also indicate any agreed upon inspections or waiver of inspections, any provided warranty information, and how the purchase will be paid.
2. Obtain Proof of Funds: Require that your potential buyer provides proof that they have the funds to complete the sale. The buyer should provide you with an official statement from their bank or institution where the funds are coming from, showing that the full amount of the funds are available.
3. Don’t Take Cash: The Real Estate Settlement and Procedures Act governs the closing process of home and property sales. A cash sale is required to be submitted by certified funds in the form of a certified cashier’s check, wire, or transfer of funds at closing for the agreed amount of the sale as well as the buyer’s closing costs.
4. Perform a Title Search: A title search will provide information on any possible liens on the property. These liens must generally be paid in full and before the closing in order for the title to transfer.
5. Sign the Final Closing Instructions: The escrow holder will provide these instructions at the early part of the sale transaction. They include items like the terms and conditions of the contract, outlining the role of escrow, and more.
Advantages for Buyers
There are, of course, advantages for the buyer when buying a home for cash. They have the benefit of no mortgage payment and that, in itself, is priceless. And no mortgage payment means no fluctuation in the rates either.
Buyers also have an added sense of security knowing that even in the toughest of financial times, they’ll have a home over their head. And they’ll have equity available should their finances need a boost or to make necessary repairs.