There are many reasons you may choose to sell your home for cash, though in general, the person who benefits most from a cash deal is the seller who has few other options, says Erik Wright, owner of New Horizon Home Buyers, based in Huntsville, Ala.
“Typically, the person who benefits by selling to a cash buyer is someone that is referred to in the industry as a ‘distressed seller' which the seller is encountering some sort of hardship that makes it difficult to sell the house with a realtor on the MLS (multiple listing service),” Wright says.
- 6 benefits of selling your house for cash
- 5 tips for selling a house to a cash buyer
- Offerpad.com review
- Bottom line: What is the fastest way to sell a house for cash?
Is it better to sell a house for cash?
Most homes benefit from being sold on the market with the help of a realtor. However, there are some houses, and some sellers, who should consider a cash sale to a quality buyer or investor.
- Your house is in need of major repairs, you have few interested buyers, in part because no bank will give anyone a mortgage for your home.
- You are behind on mortgage payments, are facing a tax lien or are already in foreclosure.
- You are going through a divorce, and selling your house for cash makes the divorce settlement fast and easy, and helps pay for a new life for both of you.
- You need the money quickly.
- You don't have the time, inclination or patience for showings, negotiations or contingencies.
- You're not getting any regular offers, and tax and mortgage payments are accruing. In other words, you don't have many other choices.
- You are eager to buy another property, and without a fast cash sale of your current house, you may miss out on your dream home.
- There are emotional reasons you need to get out of a property quickly: Maybe you are selling a home you inherited and need to settle a loved one's estate without family drama, your relationship ended and you want to settle any debt owed to your ex, or you have a business debt that needs paying.
6 benefits of selling your house for cash
Why is a cash offer can be better for a seller:
- Selling your home for cash is nearly always faster than selling on the market — there is one offer, and no financing required. “Financial distress typically comes with a tighter timeline and doesn’t allow for a financed sale,” says Andy Kolodgie, owner of The House Guys in Virginia. “If a foreclosure or tax sale is set to take place in two months, a financed purchase will not occur in time. This is where selling your home for cash can provide value with a faster close.”
- You only negotiate with one party: The buyer. If you put your home on the market, you likely have to make concessions with the real estate agent and negotiate with one or more offers, as well as deal with the lender, inspector and appraiser.
- It's easy — you don't have to clean up, fix up, repair or show a home if you are selling for cash. No open houses, keeping the yard kept or the rooms tidy. The buyer likely an investor with plans to tear down, renovate or otherwise has plans for what they are buying. Sold! See if you qualify for a home loan or refi.
- No dealing with a lender, and financing that can fall through. “When you sell a house for cash, you avoid the complications that come with a traditional home buyer's loan application,” says Chris Chavez of DFW Fast Home Buyers in Fort Worth, Texas. “Your buyer may not get the loan approval when it was anticipated or they may change their mind altogether. Since most cash buyers use their own cash to buy houses, we can close quickly and aren’t at the mercy of banks. This means a faster closing with less hassle than going the traditional route.”
- Selling a home quickly might save money — especially if you do not live there. Each month that goes by without a sale means another payment for mortgage, taxes, utilities, yard maintenance, and lost interest on any profits!
- You are behind on mortgage payments or taxes and a quick sell will help save your credit score. Check your credit score for free in 2 min. >>
5 tips for selling a house to a cash buyer
- Check the online reviews of the buyer, including Better Business Bureau, Yelp, as well as ask around on local Facebook groups, Nextdoor, and your local friends and neighbors.
- Some agents recommend at least trying to sell your home on the open market first — either with an agent or for sale by owner.
- Before agreeing to a sale, require the buyer provide proof of funds, as well as an Earnest Money Deposit (EMD) — funds in escrow while the deal closes.
- Beware of very high offers. “An investor may offer way over the home’s value to lock you in with them only to bring an inspector through and severely lower the price,” says Kolodgie, who is a real estate investor. “You’re then stuck with that investor even though their offer is now the same as all the rest you previously received.
- Get multiple quotes, including from iBuyers like OfferPad and Zillow, as well as local cash investors.
Offerpad was started in 2015 as an iBuyer, buying homes from sellers in cash, though today the company also offers home improvement advances, as well as title and mortgage services. Offerpad claims to have bought 30,000 homes in 16 markets, totaling $7 billion in revenue. Offerpad is also a brokerage, and has its own real estate listings.
- Go to Offerpad.com
- Input all the info about your home — videos and photos are a plus!
- Get a cash offer from Offerpad’s experts within 24 hours
- No seller concessions
- Close within 24 hours for cash offers — or extend up to 60 days
Offerpad promises these benefits:
- No showings!
- Closing dates from 24-hours up to 90 days — your choice
- 3- to 60-day extended stay options
- A free local move within 50 miles
- Listing services if you choose
- No overlap ownership costs (paying mortgage on two homes while you move)
Offerpad’s service fees are typically 7%, vs the usual 6% realtor fee. However, Offerpad's proposition suggests their model will actually cost less than 2% when compared with selling on the market — as well as time and headache:
Offerpad BBB review:
Offerpad is very legit and has an A+ Better Business Bureau rating based on five reviews. Offerpad's own user surveys report a 94% satisfaction rating, and many positive customer reviews.
Like some local investors, Offerpad may request repairs before the sale is finalized. Offerpad and its iBuyers buyers have the reputation for only being interested in homes that require minimal repairs.
Offerpad works in 16 metro areas at this time:
- Atlanta, GA
- Austin, TX
- Birmingham, AL
- Charlotte, NC
- Dallas, TX
- Denver, CO
- Houston, TX
- Jacksonville, FL
- Las Vegas, NV
- Nashville, TN
- Orlando, FL
- Phoenix, AZ
- Raleigh, NC
- San Antonio, TX
- Tampa, FL
- Tucson, AZ
How to sell a house for cash before or after divorce agreement finalized
In general, attorney legal advice is to not sell any assets acquired during a marriage, or that may be considered marital assets until the divorce is finalized. However, if you and your soon-to-be ex agree, you could sign an agreement through an attorney to put your house on the market to free up much-needed money for both spouses to buy new homes, pay for attorneys, and otherwise get on with life.
If you choose to sell your house — whether through an agent, For Sale By Owner, or for cash to an investor, typically if it were purchased during the marriage, then any profits would be split 50/50 between the husband and wife (or wives/husbands).
You can use your cash to pay off debt, buy a new home, invest in a different career or side gig, save for retirement or your kids’ education.
Frequently asked questions about selling your house
Is it wise to sell your house for cash?
For many sellers, a cash sale can make sense. Do your homework first!
Are companies that buy houses for cash legit?
“We pay cash for your house.”
“We buy ugly homes.”
“Cash 4 homes.”
There are many quality local real estate investors that will pay cash for your home, quickly and for a fee within 5% or 10% of what a realtor may attract on the market. Offerpad and some of its competitors are legit, as are many local investors.
Bottom line: What is the fastest way to sell a house for cash?
There are just as many shady cash real estate investors as there are legit ones. iBuyers are increasingly popular, in thanks to their easy customer experience and streamlined technology. A quality local investor can be a great option, especially if you live outside of a metro area served by an online cash home buyer.