A cash home buyer is someone who has the funds to buy a home with cash. There is no need for them to go through a bank or another lender in order to obtain financing. They are able to pay it outright from their available funds. There are some downsides to selling to cash buyers-- the biggest one being that you may get some lowball offers. However, there can be many advantages, such as a quick closing period, to selling your home to a cash buyer, but let's take a look at some of the things you probably didn't know about cash buyers.
1. A cash home buyer will buy your home as it is
A reliable cash buyer will not require you to get an inspection. This can save you a ton of time as well as money. Cash buyers are not going to expect you to make repairs or renovations. They will buy your home as it is. And most of the time a cash buyer will only want to see the property once before they make you an offer. This means no staging and no continuously having to leave your home during showings! Since you won't be required to make repairs, you'll be able to move through the selling process a lot quicker. If there are obvious repairs needed, that may factor into what a cash buyer is willing to pay.
2. A cash home buyer can move quickly through the selling process
Cash buyers are able to bypass many of the steps of the selling process required by lenders. When getting a loan, a mortgage must be underwritten. This is normally the longest can take anywhere from 30 to 60 days! Further more, if something happens to the buyers financial status, the lender may refuse the loan. With cash buyers there is no need for mortgages or approvals, so you can often close a deal within 30 days. Not going through a lender also allows you to avoid many closing costs. Of course, it is always a smart idea to get a nonrefundable earnest money deposit from your cash buyer.
3. A cash home buyer doesn't need an appraisal
Most cash buyers won't ask for an appraisal, allowing the closing process to be much quicker. Many banks and other lenders will require a buyer to get an appraisal before they will approve a loan. This is because they lender wants to be sure that the value of the house is high enough to resell in case the buyer were to default on the loan. Since a cash buyer doesn't require an appraisal, most of the time this step in the home-buying process can be skipped. Cash buyers will give you an offer based off their opinion and the seller can decide whether or not to accept it.
4. A cash home buyer is more likely to buy a unique or quirky home
Since a cash buyer doesn't have to obtain approval from a lender, he or she is more likely to buy a home that has a more unique or quirky design. Banks and lenders are concerned with making sure they'll be able to get their investment back on a property. So, oftentimes they will deny a loan for a house with a more unique style ( because it can be harder to find buyers for such properties). Cash buyers don't have to worry about getting the lender's approval, which can work in the seller's favor if they are needing to liquidate quickly.
5. Not all cash home buyers are investors
Yes, many cash home buyers are investors, but not all of them. Most investors are wanting to get as good of a deal as they can on a home ( in order to increase their profit margins). They are perfectly fine buyers, especially if you are needing to sell your home quickly, but oftentimes you can get more money from someone who wants to purchase your house for their personal residence.
In 2021, Redfin Corp found that 30% of home buyers were cash buyers. This is the largest since 2014. Cash home buyers have many advantages. You can sell your home as-is, you can close quicker than with someone getting a mortgage, you do not need to have an appraisal, and you can sell a more unique house. A cash offer may not be right for every situation, but if you are interested in selling your home to a cash buyer we can help you every step of the way.