Amid the COVID-19 pandemic, the US housing market has been white-hot, with about six million homes sold in 2021 alone. And with the demand for homes still quite high across the country, home sales may even hit higher levels in 2022.
For home sellers, the surge in home demand is great news. In October 2021, home prices were up by 18.4% compared to the same period in 2020. And if you’re looking to sell your house this year, you can expect the home to fetch a reasonable price.
For an increasing number of Americans, selling homes for all cash is the preferred option. In 2021, the number of homes bought for all cash reached 30% for the first time since 2014.
Selling your house for cash has its benefits, but there are challenges associated with this approach as well. Before you decide that a cash offer is best for you, read on to learn the pros and cons of this move.
What Are the Pros of Selling Your House for Cash?
There are many reasons more sellers are choosing to accept cash offers for their homes. Here are four of them.
No Home Preparation Is Necessary
One of the most involving things when you sell your home the traditional way is that you have to prepare it well for sale. That involves decluttering, deep cleaning, and staging the home like a professional. In other words, a significant amount of time and effort is necessary to get your home in the best condition possible to attract good offers.
Things are different when you opt to work with an all-cash company. These companies typically buy homes as is, so sellers don’t need to worry about prep work. A cash buyer isn’t interested in how pristine or messy your home is and already knows that you’ll have removed the furnishings when they possess your home.
Closing Process Is Much Faster
When selling your house the traditional way, several weeks can pass between the time you list your home and when you finally close on the sale. Some of this time goes to getting your home ready for sale, including repairs and cleaning. It’s also likely that mortgage lenders will be involved, which results in more time spent before you can finally sell the house.
When selling for cash, the selling process is much shorter. You should be able to close on the house in just days. This is a huge benefit for a seller looking to get the property off their hands within the shortest time possible.
Buyers Are Less Particular About Layouts
Sure, the housing market is hot right now, but some homes are simply more difficult to sell than others. A home with an odd layout or addition, strange colors on the walls or roof, or shag carpeting can turn the average buyer off.
This challenge can easily be avoided with cash-for-home buyers. These buyers tend to be less particular when it comes to oddities. If you’re worried that a certain feature in your home will make it difficult to sell the home to ordinary buyers, getting a cash buyer is a perfect solution.
You Won’t Have Many Strangers Walking Through Your Home
When selling your house traditionally, you’ll need to hold an open house. You may have five potential buyers walk through the house, or a hundred. For some sellers, this is a turn-off.
When you opt to get a cash buyer for your home, the first two or so buyers will give you an offer that you may find reasonable. Thus, you don’t have to worry about dozens of strangers touring your home.
Cons of Selling Your Home for Cash
A big part of being a smart home seller is being aware of the potential pitfalls of selling your home for cash. Here are some of them.
You Get a Lower Price
Cash-for-home companies are in the business to make money. They want to buy your home at a discount so they can sell it for a profit. Based on their business model, the company may opt to flip the home, clean it up and rent it out to tenants, or tear it down and use the land for other purposes.
Regardless of why the company is purchasing your home, it makes a lot of business sense for them to offer the least amount of money possible. The more they pay you, the less the profit they stand to enjoy.
You Still Get to Pay for Repairs and Improvements
Sure, you’ll not be asked to prepare your home for sale when dealing with a cash buyer. But a cash-for-homes company will factor the cost of repairs into their offer. Remember that the company wants to score a profit, so it only makes sense that they’d want you to cover the cost of repairs.
Not all companies are transparent when it comes to charging sellers for repairs. Find out how much you’re being charged before accepting the cash offer.
There’s Little Competition
The number of home buyers on the market exceeds that of all-cash companies by a great deal. That means you stand to get many competing offers when you opt to sell your home the conventional way. Most of these buyers will come in with their best possible offer, which means you stand to make a higher profit.
In contrast, there’s only a handful of cash-for-homes companies in any given state. That means you’re likely to get a single “take-it-or-leave-it” offer, which is usually low given the lack of competition.
Arm Yourself With Information Before Your Sell Your House for Cash
Choosing to sell your house for cash is a huge financial decision. That’s why you need to know its strengths and drawbacks, so you know you’re making the right move.
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About the Author/s
The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.
