The Benefits of an All Cash House Sale

If you’re looking to sell your house right now, there’s hardly a better time. However, house sales can take a long time to close out, and the money isn’t always quick to show up. Leases, mortgages, rent-to-own contracts and more can turn what should be a quick and simple process into something slow and methodical. And that’s fine, for the people who have the time to spend.
If you’re trying to trade up and get a brand new house, you might need the money right now. They won’t wait the time that you might have to. So you can put your home on the market for a cash offer. Is this safe? Is it easy? Is it worth doing more than a traditional over-time offer?

Explaining the Cash Offer

A cash offer is one where a buyer agrees to pay the full price of the house up-front without any financing or over-time options. It’s the whole market price all at once. There’s no bank to go through, no loan or lease to work out and no long-term agreement or mortgage deals. The buyer comes in and agrees to an offer, then the seller (you) gets the money as fully liquid cash assets. About a quarter of all home sales happen this way, but the way these happen and what houses cash offers are mostly made on differ from the standard neighborhood or family home assets.

One type of cash offer purchase is usually made on very poor quality homes. These are bought outright by house flippers who intend to spend more money and time fixing it up and then reselling it in a better state for a profit. A cash offer ensures that they have full ownership of the house immediately and don’t have to wait out a lengthy loan payment system over years. Once it’s ixed up, they will put it on sale to make a fast profit and repeat the process.

The other end of the buyer spectrum comes from affluent investors. Real estate is an investment, property can increase in value as the market changes – and the market is very much changing in that way right now. Investors usually have a lot of cash on hand and will expedite the buying of a house with it to get the sale over with quickly so they can start utilizing it in their portfolio as an asset. This is great for homes in good condition or in excellent neighborhoods where values alone may keep regular buyers from making the same purchase.

Benefits for the Seller

Cash offers have a great benefit for the buyer. The sale closes almost immediately. No waiting around, weeks to move out – once it’s done, the deed is traded and the home belongs to the buyer. It’s just not instantaneous – about two weeks. That’s enough time to pack up everything, deal with the last utility bills, tell all the neighbors, and get one last hoorah out of the home, and then you still have another week leftover to do clean up or just get moving to a new place.

Cash offers skip the lender and can also, potentially, skip the realtor agent. This means less fees from lenders or loaners or agents who take a cut as part of their commission. You won’t spend money on marketing your home to a bidder’s market or competing in local real estate either. There are services that focus specifically on cash offer sales, and the people who want them will seek them out first. You find the buyer with a strong portfolio and offer your real estate to them. For those buyers, the quality of the home only matters in terms of their ability to mark it up.

All cash offer sales are much easier to set up for. You don’t have to do any prep work. There’s not even a need to clean the house. What you need are the hard numbers, square footage and a reasonable offer to pay. Cash buyers aren’t too likely to attend a showing or special event. At most, they may want to see it as it is: the way you live in it. It will give them a better taste for how it’s been treated and what they can expect.

There are no lenders or bank programs to go through, which means less paperwork and less headaches to get into when waiting for everything to get filed away. It’s a very straightforward process, offering much less stress than there is dealing with all the middle people who can miscommunicate, get bogged down in their own work and neglect your deal until the last stressful minute. This happens on your schedule, with what is convenient for you and the buyer first and foremost.

How do you know if you’re getting a fair price for your home? A real estate agent will often set up a quote for your property when you start working together and this will set its place in the local market as either a beginning or final bidding price. Then, that price can be negotiated by stronger buyers who have more leverage over the agent who wants to sell the home at a good enough price to make a commission. Where do your feelings count? An all-cash offer sets a price and, usually, accepts it. The buyer may have their own ideas of a price, but if you lead with a strong and factually established quote, you can keep the wiggle room low. You don’t need to be a Wall Street executive to land this sale, you just need to be honest.

Cash Offers and Us

Florida’s real estate market has some of the most pristine and high-value properties in the entire market, with plenty of amenities and access to some of the country’s best resorts, beaches and high-class cities. Learn more about how you can get the best value on your cash offer for your Florida home today!

How can I get a loan to fix up my house?

How can I get a loan to fix up my house? So you want to sell your home. That’s great! The housing market is on an upswing right now. Houses leave the market fast with high-cost buyers ready to make a move as soon as the offer is solid. But what if the offer isn’t quite so solid? What if there’s a soft spot in the floor, the paneling, some untreated damage or outstanding issues that affect the resale value? Nevermind selling a home, what if it’s a home that’s hard to live in?

If you plan on making money with your home, and you know it’s worth more than the pre-fix estimate, you may consider reconstruction efforts to fix up the house, solve its problems and increase the value before going to market. But that costs money, too. If you had the money to build a house, you wouldn’t need to sell one so fast. It’s a dead end problem. How do you pay to sell a house?

Paying out of pocket is not feasible for most. Not everyone is a skilled carpenter or home repair expert. However, just about anyone can get a simple loan to fund their repair efforts and then pay it off with the profit made from the sale. There are plenty of different loans you can get which will serve you well as you remake your house for the buyer’s market.

Home Equity Loan (HEL)

If your home is already highly valued, but with enough obvious issues to make it unattractive for the market, you can borrow against the established value, or equity, of your home as it stands. Home equity is the home’s value, minus the outstanding balance of a mortgage. For those with a mortgage, this doesn’t get rid of it – it adds to it, meaning more long term payments on the house.

The interest rates are usually fixed and loan terms can last for up to 30 years. These are more for loans to undergo a big project, something huge that will add serious value to the home in the long run, which will make it a better sell for a higher profit. If you already have a good home, but want to drive up the cost a little more, an HEL is a great choice.

Home Equity Line of Credit (HELOC)

A HELOC is very similar to an HEL, but it works based on a line of credit. Rather than refinancing, the loan must always be repaid in full and is tied directly to your credit score, so it can be dangerous to take on if you’re not prepared for the consequence. There’s no minimum for a home equity, but there’s also no way to go higher. Rates are up to the loaner, too.

These are better for quick turnarounds or small jobs where you need a little extra money that you can afford to pay off soon. If you’re close to closing a deal and know you can sell the home fast once it’s repaired, you can take a HELOC and knock out the job before the first payment is due, then pay it in full and come out with greener credit and a decent profit.

Cash-Out Refinance

Cash-out refinancing is a refinancing strategy, not a loan, but it works by exchanging your current mortgage for a new one with a larger balance. Then you get a payment, in cash, from your old mortgage which the new one replaced based off the adjusted equity of the home.

It’s not a new mortgage on top of the old one, the old one is paid off by the new mortgage and the difference in cash is paid to you. You still have to pay off the new one, but you get cold hard cash that you can spend on anything without restriction. If there are costs for repairs that aren’t covered by specific loans or if your regular lenders won’t trust you with a credit line, this is a great option for a fast turnaround of cash to labor, and then house into profit.

203(k) Rehab Loan

Private loan lenders can be brutal with rates and adjustments. They follow their own rules. The Federal Government sticks to the books as written and stays within the lines. A FHA 203(k) or Rehab Loan combines closing cost payments and loan payments into one loan. The stipulation is that the loan must be spent on home improvement. Only one payment services both purposes.

The down payments are low, but so is the renovation limit of up to $5,000. It’s great for consolidating repair costs and closing costs into one loan, but the repairs will need to be easy to fix in the first place for such a low ceiling. If the costs go outside of what the government considers “home improvement projects”, it can’t be used, so you’re playing by their rulebook now.

Personal Loan

Possibly the riskiest, but also most potentially rewarding, is a personal loan. It’s a plain Jane regular loan that most banks or lending agencies will offer. Personal loans are unsecured, making them the fastest to obtain. They’re also fast to close, with maximums of two to five years even on the best credit. They’re out to make money off of you, whether you get your house sold or not.

But the loan amount and interest is adjustable. You can get a way better loan than you think if you have substantial equity and a high credit score to start with. Because they’re fast, they can be used for emergency repairs, like a HVAC system or plumbing. If the sale date is closing in and something goes wrong, a quick personal loan can take care of it and leave you with plenty of time to spare.

Contact us today!