Why Should You Sell to a Cash Home Buyer?
When selling a home or property, the traditional real estate route may not always be the right choice. You’ve likely already seen advertisements for companies who are offering to pay you cash for your home, but maybe don’t understand all of the advantages of selling to a cash home buyer.
Even though some “cash for homes” companies may have a bad reputation, the truth is that most cash home buyers are legitimate businesses that offer a useful service to millions of sellers every year. And just like with any other industry, there are companies that operate ethically, and unfortunately, some that don’t.
At the end of the day, if you’re looking to sell your home quickly no matter the condition it’s in, this might be the very best way to do it.
What Is A Cash Home Buyer?
A cash home buyer is an individual or a company that offers an alternative to the traditional real estate transaction. Instead of homeowners having to go through the lengthy process of selling a home, a cash home buyer will allow the homeowner to sell quickly without having to deal with mortgages and financing.
Cash home buying companies usually fall into one of two categories – home flippers and home investors.
What Is A Home Flipper?
In most cases, cash home buyers are companies that fill into the first category, “home flippers”. This means that the company only makes money once they sell the home.
Typically these companies will make a cash offer on just about any home, no matter the size, the location, or the condition. These cash home buyers will operate on very specific formulas when making an offer, so the final number will be dependent on the current condition, the cost for repairs, and the total estimated value of the home once the repairs are made.
In many ways, this is great for homeowners. They won’t have to lay down a lot of money making costly home improvements or making the house presentable for showings. It also means the homeowner won’t have to spend months waiting for a qualified buyer to come along.
On the downside, however, you’re likely going to get considerably less for your home from a home flipper than you would if you were to make the repairs and list the house yourself. When the home flipper factors in the repair costs, their risk, and their profit margin, you may find yourself getting 40% to 50% less than you would going the traditional real estate route.
What Is A Local Home Investor
The second type of cash home buyer that you’re likely to work with is known as a local home investor. A local home investor is very similar to a home flipper in that they’ll buy a house in any condition for cash, the big difference is how they make their money.
Instead of making a profit buying fixing and selling the homes they purchase, a home investor renovates the home with the intention of holding it longterm. The investor will then either rent the property to tenants, rent the property on Airbnb, or find another way to make recurring monthly income on the property.
It’s only after holding the property for several years that a home investor considers selling the property. This means that not only have they made recurring income on the property each month since the original purchase but that the sale price will likely be much higher than it would’ve been had they flipped the property right after buying it.
So what does this mean for a homeowner? Well for one, you’re a lot less likely to receive a “lowball” offer from a home investor. Since these cash home buyers have a much larger potential profit margin than a home flipper, they can be a little bit more flexible with the amount they offer on the home.
Second, if you’re a homeowner facing foreclosure or some other hardship but don’t want to have to leave your home, a local home investor may be able to work with you by allowing you to stay on as a tenant. In this situation, you’ll be able to get out from under the financial hardships of owning the home without actually having to move.
Selling To A Cash Home Buyer – The Less Stress Way
When you deal with a cash home buyer, the entire selling process is a lot less stressful than the traditional real estate route. You don’t have to worry about whether the buyer is qualified to purchase your home or have to go back and forth with price negotiations.
With a cash home buyer, the process is easy. The buyer will assess your home, make a fair, all-cash offer, and you then have the opportunity to either accept or reject. You don’t have to worry about the buyer securing funding, mortgages, final inspections, or any of the other headaches.
You will also have a lot less paperwork to deal with, mainly because you won’t need a lender or mortgage company on the day of closing. With cash sales, there is very little paperwork, thanks to the fact that no financing is needed.
Much of the time between the signing of a real estate contract and closing day is spent on verifying the income of the buyer and going through his or her finances to make sure that he or she can afford to buy the house. With a cash home buyer, you get to skip all of that because the buyer has already been “qualified.” When you work with SFL Partners, this process will typically take about 7-10 days from start to finish.
How Selling A Home For Cash Works
Cash buyers can be found in nearly every city across America and no matter where you are, the process will be pretty similar.
First, the buyer will come out and perform a cursory inspection of your property. This allows the buyer to get an understanding of what kind of investment they’ll need to make into home repairs.
Once the inspection is complete, most cash home buyers will make you an offer within 24 hours. In some cases, you may even receive an offer right on the spot.
These offers will always be “no obligation” offers, so there is no pressure to accept the offer on the spot. Just as with a traditional sale, the seller is the one who has to decide if the offer is worth it or not so you can always take it or leave it.
If you do accept the offer, the rest of the process will typically move very quickly. From the time that the homeowner accepts the offer, the transaction will usually complete within a week. This means that instead of having to wait months and months for a home sale to close and for the funds to be transferred, you will receive cash for your home in about seven days.
Other Advantages of Working With A Cash Home Buyer
Of the many advantages of working with a cash home buyer, the biggest advantage is being able to skip the traditional real estate process. You’ll be able to skip the headaches like listing your home with a realtor, having people constantly walking through your home, and constantly cleaning to keep the house presentable.
Selling to a cash home buyer also allows you to “skip the competition”. At any given time, there may be hundreds or even thousands of homes for sale in any given area. In these situations, it may be difficult to attract buyers even if your home is in great shape. Homeowners who are relocating to a new state or country may not have the luxury of waiting for the right buyer to come around.
Are All Cash Home Buyers The Same?
In short, no. Just like with any other industry, there will be large businesses, small businesses, local businesses, franchises, businesses that operate ethically, and unfortunately, some businesses that do not operate ethically.
And like in any other business transaction, it always makes sense to do your research on the company you’ll be doing business with before closing a deal. Luckily vetting cash home buyers is a lot easier today than it once was.
The first place you’ll want to start is by performing a simple Google search on the company name and location. Make sure to include the location so that if the company is a franchise or chain, you’ll be reading reviews on the specific branch you’ll be dealing with.
Don’t just stop at one source either. Look at Google My Business, Yelp, the BBB, and any other review sources that may turn up in a Google search. While a company may have attempted to manipulate its reviews on one channel, you can usually get a pretty clear picture after looking at several sources.
Working With SFL Partners
SFL Partners is one of the fastest-growing cash home buyers in South Florida. Unlike some of the other guys, SFL Partners is a local home investor, not a house flipping company. This means that we’re not in it for the “quick flip” – we make long-term investments in properties.
If you’re interested in getting a no-obligation, cash offer for your home, the process is simple. Just give us your contact information and the property’s address and we’ll get you an offer for your home in about 24 hours.