Thinking about selling your house as-is to a cash buyer?

Most cash buyers are professional real estate investors. When they put a house under contract, they almost always close on it, and fast. 

Perhaps they have the cash already prepared and sitting in a checking account, or perhaps they have a private lender (such as a hard money lender) on standby, ready to write a check. Either way, funding doesn’t present a problem for them. 

If you need to close quickly, cash buyers can make that happen. But how do you go about finding them? What do you need to know about how to sell your house as-is for cash? 

Before committing, make sure you understand the pros, cons, and process of selling your home as-is to a cash buyer. 

Should I Sell My House for Cash?

When you sell your house for cash, you get a quick sale and a near-certain closing. 

What you don’t get is top dollar for your home. 

That begs the question: What’s your priority? Do you prefer a fast closing or a higher sales price? 

Some distressed sellers don’t have the luxury of time, they can’t afford to list their house on the MLS and wait weeks or months for the right buyer to make the perfect offer. Even sellers who aren’t under the gun of foreclosure or tax sale might prefer to sell quickly, such as owners who inherited a house currently in probate. 

Then there are the repairs. To sell for the highest possible price, property owners typically do some sprucing up, whether that’s as simple as touch-up painting or as involved as renovations. Not every seller wants to mess around with home upgrades, even relatively simple ones. 

Real estate investors don’t mind that the property isn’t in perfect condition. In fact, they prefer it — more repairs means more opportunities to add value and equity. 

Pros & Cons of Selling Your Home for Cash

As touched on above, selling your house as-is to a cash buyer comes with both advantages and downsides. 

Benefits of Selling to a Cash Buyer

Selling your home as-is for cash has plenty of perks. Some of the upsides to selling to a cash buyer include:

• Quick Closing: Cash buyers don’t need to go through the tedious underwriting and approval process required by conventional mortgage lenders. Rather than taking 30-60 days to close, they can often settle in 10-20 days. 
• More Certainty: Many homebuyers fail to get to the closing table, for one reason or another. Their financing falls through, or they pull out after seeing the home inspection report, or simply get cold feet. Real estate investors know what they’re looking at, and only sign contracts when they know they can close. 
• No Repairs Required: When you sell your house as-is to an investor, you don’t have to lift a finger for repairs or home upgrades. The buyer will renovate the property as they see fit. 
• No Inspection Contingency: In most cases, the investor does their own due diligence, including a walk-through of the property with you before making an offer. They often bring their contractor with them, to get an instant quote for repair costs. That means they generally don’t need to include a home inspection contingency in their purchase contract. 
• No Realtor Commissions: Sure, the sales price will be lower — but you won’t have to split it with real estate agents. 
• No Open Houses or Parade of Prospects: When you list your home on the MLS, you have to keep your home pristine while endless prospective buyers traipse through it. You may have to schedule open houses, while dozens of strangers poke through your home and recount all its flaws. With a cash buyer, you simply schedule a private walk-through and receive an offer within a day or two. 

Downsides to Selling a House As-Is for Cash

For all those upsides, selling to an investor for cash comes with its share of drawbacks as well. Go into the transaction fully aware of the following downsides and risks. 

• Lower Sales Price: When you sell to a real estate investor, they need to buy at a price low enough to leave a margin for profit. In most cases they offer significantly less than a homeowner peer would offer. 
• No Emotional Connection: Some sellers like the idea of selling to a homeowner similar to themselves. If they raised their kids in that home, they might prefer to sell to a young family looking to do the same. Real estate investors only look at the profit potential, and plan to renovate the home and sell on the open market to the highest bidder. 

Steps to Selling Your Home for Cash

Decided to sell your house as-is to a cash buyer? 

Follow these steps for the fastest settlement at the best possible price. 

1. Research Full Market Value

You won’t actually get full market value from a cash buyer — but you should still know what it is. Otherwise, you won’t know what you’re giving up in favor of a fast, simple sale. 

Start by reviewing recent sales in your neighborhood on Zillow. The best comparable sales (“comps”) are the closest, most similar properties to yours, which sold the most recently. The perfect comp would be an identical home right next door to yours that sold yesterday. 

The condition of your property matters. If your property is outdated, take that into account when looking at other nearby sold properties and getting a sense for your home’s fair market value. 

2. Shop Around for Offers

Multiple offers help you negotiate the best price when you sell your property on the MLS, and it’s no different when you sell as-is to a cash buyer. 

Start by reaching out to our company, Max Properties. We’ll walk through the property with you and make the best offer we can based on your property’s condition and location. 

But we’re not the only cash buyer in town of course. A quick Google search for cash home buyers or “we buy houses” companies in your market should turn up a handful of other buyers. Start with this list of cash home buyers to get a few ideas.

Invite them to come tour your property with you and make their best offer as well. 

3. Evaluate Offers & Negotiate

As you collect offers, ask to see proof of funds if the buyer doesn’t volunteer them. They should provide either a bank statement showing enough funds to buy your home or a letter from a hard money lender that they’ve worked with many times before. 

You can also ask how many homes they’ve bought. A company that’s bought hundreds or even thousands of homes can almost certainly close. A novice real estate investor working on their first, second, or third deal doesn’t offer the same certainty. 

Once you’ve collected three to five offers, try negotiating with a counter offer. Some buyers won’t budge, having already offered their best possible price. But others might have some wiggle room on price — the only way to find out is by pressing them. 

Finally, make sure the discount between your best offer and the home’s full market value is worth the fast, easy sale. Calculate in the real estate commission and a seller concession, which most home buyers ask for to help with closing costs. Finally, factor in the costs of repairs or upgrades you’d have to make in order to sell for top dollar. If you can afford to wait and make repairs, make that judgment call now or forever hold your peace. 

4. Watch Out for Scams

Unfortunately, cash transactions worth hundreds of thousands of dollars attract plenty of scammers. 

Do a quick internet search for the company you’re considering selling to, and look at their reviews on multiple platforms. How many reviews do they have? How old are their oldest reviews? Do they have a deep, long-standing social media presence?

In particular, watch out for any buyers who make a “deposit” into your bank account, only to ask you to refund it. Many scammers do this, only for the seller to discover that the “deposit” never actually finalized in their account. 

5. Sign the Sales Contract

Before signing on the dotted line, read every word in the contract. Yes, it will take you an hour or two, and yes, you might need a shot of espresso to keep you from dozing off. But you’re selling what’s likely your largest asset, and you need to read the fine print. 

In particular, look at any contingencies in the contract. Did the buyer leave themselves any escape clauses? How comfortable are you with them? If they left themselves plenty of ways to pull out of the contract and get their earnest money deposit back, consider negotiating on these points before you sign the contract. 

Finally, make sure you can live with the closing timeline. If you must close by a certain date, make that crystal clear to the buyer — both verbally and in writing. 

6. Manage the Settlement Timeline

Signing the contract of sale isn’t the end of the road. From here, you need to stay on top of buyers to make sure that they actually perform. 

Granted, professional real estate investors need less “management” than Howard Homebuyer. But you still need to stay in close communication with them.

If they require an appraisal or home inspection, schedule it immediately. Ask the buyer about the progress of title searches, and schedule the settlement date as early as possible. If the buyer is borrowing a private money loan, ask for frequent updates about their funding. 

7. Cross the Finish Line of Closing

A day before closing, ask to see the settlement statement. It lists all expenses paid by both the buyer and seller, and the bottom line amount that you’ll walk away with. 

If you see anything that confuses you, ask about it now. Do not wait until settlement, when the documents have all been drawn up and any changes would require a rescheduled closing. 

Call the title company to provide them your banking details, if you want the money wired rather than a bank check that requires depositing. 

Sitting down at the settlement table and signing the documents should be a formality only. You should already know every detail and every document that needs your signature at the closing table.

Final Thoughts

Cash buyers can take most of the headaches out of selling your home. 

They don’t require you to make repairs, don’t require home inspection contingencies, and won’t come back to you after the inspection demanding a lower price or other concessions. Real estate investors can close quickly and avoid the risks of financing falling through. 

And you can skip all the hassles of open houses and endless property showings. 

In exchange, you sell your home for less than you could to a fellow homeowner. 

Only you know whether those tradeoffs fit your priorities. If you’re on the fence, consider getting a cash offer quote or two from investors, and comparing them to what you believe your home’s full market value to be. Bear in mind that you’d have to pay a real estate agent commission if you sell “retail” to a homebuyer, and you’ll likely have to offer a seller concession. 

Run the numbers, and decide whether all the conveniences of selling your home as-is to a cash buyer are worth the lower bottom line number.