Does closing quickly and getting cash for your house sound good? Does not dealing with buyer showings, consistent cleaning, or repairs sound attractive? Selling for cash definitely has some intriguing benefits, which is what we will discuss in detail in this article. We also tell you how you can get a cash offer to see if its a good option for you.
Selling a house to a cash buying company is probably the least familiar home selling strategy to most home sellers.
Selling a house for cash is not the best fit for every homeowner. But it is the best fit for other sellers. And it may be some sellers’ best or only option.
In this article we discuss the benefits of selling a house for cash. This will allow you to determine if its a good option for you.
Disclosure: Our company is a we buy houses company operating in Cleveland Ohio as well as central and north east Ohio. If you want to learn more about how we buy houses for cash , or if you want to get a free cash offer then we would love to talk to you.
The Benefits of Selling a House For Cash in Cleveland
There are a few critical benefits to selling a house for cash. These benefits make it an attractive option vs. selling with a realtor or selling as a for-sale-by-owner (FSBO). These benefits may also be looked at as requirements for those sellers who cannot sell through a traditional sale. In other words, the factors below might make selling a house for cash the only option for a given seller.
At a high level the benefits of selling a house for cash are:
- A significantly faster time to close
- A much higher level of convenience
- Reduced out of pocket costs including home repairs, updates and staging
- No realtors commissions, fees or closing costs
- The ability to sell a house in disrepair that won’t qualify for traditional financing
We will now outline these benefits/requirements below in more detail.
1. A cash sale is a quick sale
This one is simple. When you sell a house for cash you can close quickly. This is because the buyer is paying cash. They doesn’t have to meet all the hurdles and requirements of a traditional lender. If you want to/need to sell it by an a given deadline then cash if your best/only option. Cash buyers (we buy houses companies) can close quickly in a matter of 7-30 days vs. months and months.
One of the biggest cons of listing on the traditional real estate market is the time it takes to close. Unless a house is for sale in a hot market or priced well below market it is likely that a house will sit for a while. Then the time it takes for the sale to close is lengthy as well.
In our article How Fast Are Homes Selling in Cleveland, OH we determined that on average it takes about 82-112 days (~12-16 weeks) to close.
Don’t want to (or can’t) wait this long? Then selling a house for cash may be your best if not your only option.
Resources like Redfin’s market insight tool can help. You can use it to determine what the average days on market (DOM) time is for a specific zip code. Add 30-60 days on top of the “days on market” time period. This will give you the total estimated time to close.
2. A cash sale greatly reduces (or eliminates) out of pocket costs to a seller
Cash home buyers buy houses as-is. So the costs associated with improving, fixing, updating, cleaning, etc. a property before listing it on the market are eliminated. It also eliminates the costs associated repairs found during a traditional buyer’s home inspection.
Simply stated, a cash buyer will buy the house as it sits. There is no painting, cleaning, repairs, new kitchens, updated bathrooms, carpet cleaning, landscaping, etc required. A seller can just hand it over as is. This benefit results in potentially thousands of dollars saved out of a seller’s pocket.
Most of these costs have to be paid for before the seller gets the proceeds from the sale. They are “upfront”, “out of pocket costs.” If you don’t have adequate cash in the bank it can be an issue.
If you want to getting your desired asking price on the market you need to put some money into it. It requires quite a bit of preparation, repairs, and improvements before listing your property. Your house needs to be in tip top shape. At the least it should be in similar condition to houses that have sold for a similar price.
This may require that you make updates, such as in kitchens and bathrooms and to the home’s flooring. It may also require that you pay for repairs before listing.
If you don’t fix the issues before listing you will need to give the buyer a credit at closing. Necessary repairs will come up in a home’s inspection.
This is a critical factor to consider when selling a house. Want to get top-dollar for your house? Then these types of preparations and upfront costs will be a necessity. If you aren’t able to make the repairs you might need to list it as-is.
3. A cash sale maximizes seller convenience
Not only are out of pocket costs eliminated and time minimized as we just discussed but convenience is also maximized.
Cash buyers buy as-is which means that no preparation for the sale is required. This eliminates cleaning, painting, repairs, coordination of contractors, etc., greatly reducing a seller’s hassle and required time commitment.
Cash buyers also buy directly from sellers so there are no realtors involved. There is nothing wrong with a realtor; it is the process of the traditional sale that creates extra work and potentially some headaches. The traditional sales process involves showings, open houses and inspections. These can be taxing on a seller.
When a seller sells to a cash buyer none of these activities, and none of the preparation that goes into them are required.
Also, if a property is a rental property there is another added benefit to selling a house to a cash buyer. Because there is no realtor and showings and open houses are eliminated the hassle of coordinating and getting permission to show occupied rental units is removed. Anyone who has tried to sell a rental unit with tenants knows that scheduling showings can be a nightmare.
Cash buyers also can buy houses with tenants in them. They know how to remove or deal with problematic tenants. This allows a seller to sell a property quickly instead of waiting for leases to expire.
4. Cash buyers eliminate closing costs and realtor commissions
Cash buyers typically pay all closing costs. This can save a seller some serious money. This is even more meaningful when considering that many times a seller will cover not only their own closing costs but also the buyer’s closing costs.
Selling a house for cash also eliminates one of the largest, if not the largest expense for a seller: realtor commissions. Cash buyers buy directly from homeowners without realtors involved. Unless a seller is already working with a realtor the seller won’t have to pay realtor commissions. If a seller is being represented by a realtor the seller will most likely still be on the hook for covering the commission cost.
Realtor commissions are, on average 5-6% of the price that the house sells for (not on the net profit a seller receives). To put it into perspective for a house with a $250,000 sales price and a 6% commission a seller would save $15,000 that they would otherwise give to a realtor for their services.
5. A cash buyer will buy a house that doesn’t qualify for traditional lending
Although cash buyers buy all types of houses they generally look for homes that need repairs, have deferred maintenance or are even vacant or in disrepair. This is how such a company makes a profit on the property: by buying a house that needs a lot of work for a discount, rehabbing it and then either re-selling or holding it for rental income.
Most buyers buying residential homes as a primary residence are going to buy it with a traditional mortgage, such as Fannie Mae, Freddie Mac and FHA loans.
Traditional lenders, especially programs such as FHA have strict guidelines and requirements that both the borrower and the property must meet. In turn, if your property has a lot of repairs, deferred maintenance or safety issues it is unlikely that a traditional lender will give a buyer a mortgage to buy it.
The only option for a seller in this situation would be for the seller to correct the problems prior to the close of the sale. This situation presents an issue for those who are unable to pay for repairs out of pocket before they receive the proceeds from the sale. If the house is in bad shape then a seller’s ability to complete the repairs out of pocket becomes very difficult to accomplish.
Lastly, if the house is in bad condition it is likely that the majority of realtors will not want to list it. If they do, they will need to list it as an as-is sale for cash only (or even a pocket listing). In turn, if you have a house that needs work and won’t qualify for a traditional mortgage (and/or that no realtor will touch) then selling your house for cash may be the best if not your only option.
Conclusion
To recap, the high level benefits of selling a house for cash are 1. a significantly expedited time to close, 2. a high level of convenience, 3. reduced out of pocket costs, 4. no realtors commissions or fees and no closing costs, and 5. the ability to sell a house that does not qualify for traditional financing (or one that a realtor won’t want to sell).
Selling for cash is not the right option for every home seller. But it may be the right option or the only option for those needing a quick sale, maximum convenience, and/or reduced out of pocket expenses. Also, it may be the only option for those with a property that will not qualify for a traditional mortgage.
Who is Sesa Properties?
Sesa Properties is a local, established we buy houses for cash company operating in greater Cleveland, OH. As a company, our number one goal is to help people get back to what is important to them in life. In order to achieve that goal we are dedicated to making the selling process as expedient and painless as possible for those who need to sell a house in Cleveland.
And yes, our company is a we buy houses company operating in Cleveland Ohio as well as central and north east Ohio. If you want to learn more about how we buy houses as is, or if you want to get a free cash offer for your as is home then check us out here.