A real estate agent goes by the normal selling procedure of listing, marketing, communicating, negotiating, and closing. Most buyers have mortgages, and the process takes several months to reach the closing process. Consequently, the lender or buyer backing out before closing is a real possibility, throwing away hard work and effort while forcing sellers to start over. Nevertheless, an alternative to working with an agent is selling to a homebuyer directly. Why is this the better choice?
Buyers willing to pay cash can expect a faster process. Specifically, sellers can transfer ownership to the buyer in less than 2 weeks. This is due to less paperwork. Less paperwork reduces the steps needed to reach homeownership, so expect to be a homeowner faster. Requirements such as home inspection and title searching are necessary, yet an appraisal and credit checks are not. Additionally, all parties must wait on the lender’s approval, which isn’t immediate. In summary, the quick process is very convenient for sellers, especially sellers in sudden situations such as relocation, divorce, bankruptcy, or foreclosure.
No Change of Heart
With a quicker process, expect the deal to remain solid until closing. Deals fall through due to lender’s disapproval, buyer disapproval, home inspection, or unexpected circumstances. The speedy process reduces delays as well because the buyer and seller are serious about finalizing the deal. Additionally, there are no worries about the home’s location. Buyers will purchase homes in unsavory neighborhoods because they view the home with the same potential as favorable neighborhoods.
While sellers pay closing costs, the redeeming feature is bypassing commission. Agents require 5-10% commission for their assistance in selling the home, and it comes from the closing sale. Since no agent sold the home, more finances end up in the seller’s pockets. Besides commission, several fees such as appraisals, seller concessions, and holding costs are not mandatory because those payments connect to agents and lenders, not cash buyers and sellers without agents.
Sadly, most cash offers are less than asking price. There’s a reason sellers fix the home if the cash offer equals listing price or above listing price. The extra dough is incentive to impress the buyer. Sellers will not emphasize repairs when buyers offer amounts less than asking price. Therefore, offers below asking price receive the home as-is to justify refusal to repair demand.
Interested homebuyers are abundant in cash, but sellers can ask for other ways to pay. Certified funds and cash payments are examples of options buyers can offer. Sellers with mortgages can sign over the mortgage payments to the buyer, pending approval from the lender and both parties.
It’s tempting to pick this detour in the real estate process. The advantages are convincing. The sticking point is the buyer. Like all industries, there are scammers. Without an agent’s guidance, sellers must trust their gut about the buyer. Research the buyer’s history and learn about the buyer’s aspirations before accepting cash offers. The best deals come from like-minded people with similar aspirations.