How to Sell Your Property to a Cash Buyer
2020 saw civil unrest, an economic downturn, and an ongoing global pandemic, but two things were largely unaffected by the issues in 2020 – the stock market and the housing market. Despite economic issues, the real estate market is as hot as ever, especially in the Mile-High City of Denver.
What is a Cash Offer?
What makes an offer a cash offer? The buyer won’t have a literal bag of cash at closing, right? A cash offer means the buyer already has the full funds to purchase your home and will not need to use financing or apply for a mortgage.
Why is Cash so Popular?
Cash is so popular because it cuts down on time and resources for both buyer and seller.
The issues of 2020, especially the shutdown of large-scale urban work centers like New York City and California, have more people than in recent memory cashing out of their expensive downtown condos for quieter suburban homes. Instead of moving out to upstate New York or moving further north up California people are cashing out and coming to wider open and relaxed states like Colorado. Buyers are coming from all corners with cash in hand leading to a Colorado cash purchase boom.
Pros of Cash Purchases
Fast – With a cash offer you get to skip several steps and don’t need to worry about the buyer qualifying for a loan. You can save days, weeks, and potentially months off the home selling process by accepting a cash offer. Time is money, right?
Cons of Cash Purchases
Get Less Money for Home – This is likely the biggest con to selling your home for cash. Remember the earlier statement “time is money?” Well, buyers who have cash in hand know that and will try to get a lower price thanks to the ease and efficiency of a cash offer. It’s up to you as the seller to decide if you want less money right now or more money (and more paperwork) later.
Yes, with the cash you avoid paying interest on mortgage loans but with rates at rock-bottom levels, you could potentially earn more with that cash elsewhere. Have a thorough talk with your financial advisor about your investments and you might decide a low-rate mortgage isn’t a bad idea.
Pros of Financing
Frees Up Cash – If you buy a home in cash you gain a great asset but lose liquid funds that you might need elsewhere. By financing, you can use your cash for other potential investments or as a reserve for emergency situations.
Cons of Financing
Tedious – Qualifying for a home purchase with a mortgage is one of the most long-winded and tedious transactions on the market today. Though mortgage companies are getting more efficient every day there is simply a lot involved in the modern mortgage to protect all parties involved. Cash offers avoid most of the tedious paperwork saving countless hours and headaches.
Do You Need Real Estate Agent for Cash Offer?
Yes, you still need a real estate agent for a cash offer. Cash helps you skip many of the steps that a real estate agent would traditionally assist with, but any real estate transaction is a complicated process with the possibility to lose thousands. A listing agent will help you better manage the home sale process and protect your property when there’s cash on the table.
Learning How to Sell Your Property to a Cash Buyer
Accepting a cash offer includes many benefits including a fast and efficient process but you might make have to take a lower offer with cash. No matter if you want to go with a cash deal or bear through a traditional real estate transaction, a real estate agent is necessary to facilitate the process.