Selling your home for cash has a number of benefits, including the reduction of closing costs and stress. However, it should be understood that this type of sale can also result in lowball offers. Cash buyers are typically investors, and so emotional appeal is irrelevant to them. As such, they are more likely to make a lowball offer and are less likely to make repairs. Here’s what you need to know.
Selling a home for cash involves fewer contingencies
Among the advantages of selling a home for cash is the absence of any kind of contingency clause. As the name suggests, a contingency clause requires that the buyer sell his or her existing home before closing the deal. This clause is much less common than others, but it does provide the seller with some assurances. If the buyer fails to sell his or her home within a specified time, the contract will be voided and the seller will remain on the market.
When selling a home for cash, the buyer has the option of waiving the contingencies in exchange for a lump sum payment. However, the buyer will lose his or her earnest money and could be held liable for any additional damages. Despite this fact, most contingencies are designed to protect the buyer, and there is a clause known as the kick-out clause that allows the seller to kick out the buyer.
Saves thousands in closing costs
Many of the closing costs are negotiable. Among them are commission rates, attorney fees, recording costs, messenger fees, and more. Before committing to a lender, get a good faith estimate of the costs you will incur. Then, compare lenders and ask them for their closing cost assistance. For example, some banks will waive their origination fees or offer a reduced rate for “Preferred Rewards” members.
Another advantage to selling your home for cash is the speed of closing. A cash transaction can move faster, so it can offer a negotiating edge for the seller. Plus, a buyer who is fully prepared to buy with cash will not have to worry about mortgage paperwork, processing time, or interest payments. This alone could save thousands of dollars in closing costs throughout your life. You’ll be happy to know that closing costs are significantly lower than you thought they would be.
Reduces stress
One of the major factors that reduces stress when selling your home for cash is removing the hassle of an appraisal. A home appraisal is one of the most stressful aspects of selling your home, as a low appraisal value can ruin your deal. A cash buyer will waive the appraisal process, leaving you to worry about other matters. A traditional seller has a lot to worry about, including cleaning and staging the home, hiring a real estate agent, and maintaining the house during showings and open houses.
Another factor that can add to the stress involved with selling your home is feeling out of the loop. Finding a good estate agent is important because it can help to minimize the stress of the process. You want an agent who gets things done quickly and easily. You should compare different agents to find one that suits your needs. Once you’ve chosen the agent, you should take the time to research their reputation and their fees.
Lowers costs
A seller who sells their home for cash typically has fewer costs when closing on the sale. These costs include the closing agent’s fee, property taxes, attorney’s fees, and transfer tax. These costs are lower when a buyer is paying cash for your house, since you don’t have to worry about a mortgage. You will also save on carrying costs, which are costs associated with paying off your mortgage.
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