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.

In hot markets like Denver, cash is king, but there’s more to selling your house to a cash buyer than accepting a check and handing over the keys. Let’s learn more about selling a house to a cash buyer and the individual pros and cons of selling your house to a cash buyer over a buyer who’s financing.

How to Sell Your Property to a Cash Buyer

Selling Your Property to a Cash Buyer

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

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?

Cash gives you much better standing and negotiating power. If you’re at the table with the full amount in hand you stand taller than anyone working their way through the tedious mortgage process. If you’re selling a home and there are five offers on the table, you are most likely to pick the cash offer for its ease.

Cons of Cash Purchases

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.

Because cash offers move quickly it’s more difficult to catch mistakes. You’re also avoiding many useful documents that would normally be requested by the title or mortgage company. A good real estate agent will help you stay vigilant when there’s cash on the table.

You should only accept cash offers from reputable outfits or receive proof of funds from the buyer first. While it’s rare, there are scammers and criminals who run cash and title scams. Always verify the buyer genuinely has the funds with official proof of funds from the buyer’s bank or financial institution.

Could the wads of cash you put toward a home purchase be better used elsewhere? This is more a buying than selling problem, but cash buyers should think long about investment potential before plopping down cash on a home.

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

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.

Interest rates hit the basement after the 2008 housing bubble burst and they’ve barely crept up in the years since. Rock bottom rates mean low-interest payments through the life of your mortgage and a lower financial footprint. With low rates, you might be better suited to turn your cash to a credit card or other high-interest debt to save more in the long run.

Cons of Financing

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.

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.

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.

The Storck Team has been helping list and buy homes for cash for years and knows the unique pros and cons of cash in the hot Denver market. If you need help selling your home or need to know more about cash offers give the Storck Team a call. We’ll help with listing, offers, and do our best to get you the best possible price when cash is on the table. Take advantage of Denver’s hot seller’s market and call The Storck Team today.