Homeowners often prefer cash sales because they eliminate the uncertainty of jumping through financing hoops. When a buyer doesn’t need to wait on home appraisals and financing approval, the home sale almost always closes more quickly. In fact, a seller may prefer a lower cash offer to a higher financed one, when the certainty and speed factors outweigh financial considerations.
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Why Do Cash Sales Appeal to Sellers?
Homeowners often choose a cash sale over more traditional financed sales for a number of reasons.
For example, a seller might be facing foreclosure. If you’re behind in your mortgage payments, you can close a cash sale quickly and get caught up on the loan. That’s true even if your lender has already filed a foreclosure case.
Sellers may also need to relocate quickly. That’s often the case when a new job is on the horizon. With an increasingly mobile society and workforce, a quick cash sale makes sense to many homeowners.
In other cases, an out-of-state inheritance could warrant a fast cash sale. If you’ve inherited a property from a parent who relocated to a warmer state, for example, you could well prioritize the expediency of a cash sale over a more protracted financed sale.
Where Do Cash Sales Come From?
These days, cash offers for a home sale can come from a variety of sources, including:
- Individual buyers with cash reserves
- Home sale websites and platforms (e.g., HomeLight’s Simple Sale)
- Instant buyer (or iBuyer) companies (Redfin Now, Opendoor)
- House flippers (usually buy as-is homes for cash in exchange for a significantly reduced cost)
Avoid the Pitfalls
In some cases, a cash sale isn’t necessarily the fastest way to close a home sale.
In a short sale, you sell your home for less than the mortgage balance that you still owe. However, this approach requires your mortgage company’s prior approval and as a result it can take a lot longer to close.
Auctions benefit sellers by giving them the benefit of knowing exactly what date their home will sell. However, closing an auction sale typically takes at least six to eight weeks, whereas a straight cash sale could take less time.
Owner sale/FSBO sales are most often successfully closed when the owner already knows the buyer as a neighbor, colleague, or friend. It’s usually a complex process to sell your own home without the help of an agent, especially if you don’t have a ready buyer. That means you’ll be waiting a while for closing. However, you can have the best of both worlds here. Many agents will happily work with a cash-sale-seeking owner, especially through targeting iBuyers.
Cash Sales Can Work for You
If your home doesn’t require any major repair work, a cash sale can be the quickest way to liquidate what’s probably your most valuable asset. Consider working with a reputable home sale platform or an agent to seek out an iBuyer to protect that investment and maximize your sales price.
