If you’re a homeowner in distress or have an unwanted property that’s vacant gathering dust, then I’m sure you’ve contemplated a discounted cash offer from a real estate investor. I’m sure you’ve even received a dozen or more postcards and letters from investors begging you to sell your house.
Should you consider taking this option?
There are many advantages to accepting an all-cash offer from an investor. Below is a list of reasons why you should consider taking this route.
1. Fast cash. It is not uncommon for a bank-financed buyer to take 60-90 days before they can close on the property. With an ALL CASH buyer, you can skip all the red tape of bank financing, allowing these cash buyers to close in 7-10 days.
2. No inspections needed. With the stringent requirements banks have these days, your vacant or distressed property may not pass bank or county inspections*. The cost of bringing a property up to code can be expensive. With a cash buyer, most of the time they will buy it in its current condition with no inspections required.
3. No real estate agent fees. Since you’re dealing with investors, you shouldn’t have to pay real estate agent or broker commissions. This can save you 6-7% up front. If the investor you are dealing with is a broker or agent and you want to collect a commission, keep making calls until you find a buyer who is not a licensed broker.
4. Pay no closing costs. A big advantage of dealing with a cash buyer is that they have the cash to cover closing costs. Most buyers in today’s market ask for between $3,000 and $5,000 in concessions from the seller. This is an expense you can avoid when dealing with a cash buyer.
5. It is not necessary to qualify. It’s not uncommon for a bank-financed buyer to go through the home buying process only to be denied a day or two before closing. With a cash buyer, they have the ability to close immediately.
So, as you can see, taking a discounted price from a cash investor doesn’t mean you’ll make a total loss. The money you’ll save by dealing with a cash buyer reduces the amount you’ll pay by dealing with a bank-financed buyer. The cash buyer’s ability to close quickly without the hassle of dealing with inspectors and contractors will help you sleep much better at night.
*For more information on building inspectors, click here.