Are you preparing to sell your home or a real estate investor interested in all the ins and outs of a cash deal? Or have you recently been offered a cash deal, or do you simply want to compete with other sellers who accept cash offers? Get yourself a pen and paper as you might need to take down some notes from this guide on selling your house for cash!
Difference between cash and mortgage-based deal
It is safe to say that the buying and selling process of real estate can vary significantly between a cash offer and a mortgage-backed deal. To begin with, the process for cash-based deals tends to consume a lot less time. The reason for that is due to the absence of a lender involved, which can extend the whole process through lengthy appraisals, mortgage applications, underwriting, and a whole bunch of paperwork in general.
Another difference between a cash offer and a mortgage
Below are some of the accompanying differences to the ones mentioned above
• Appraisals –since a mortgage-based payment for a real estate typically involves a lender, which then requires an appraisal to calculate the risk and rate of return on their investment, sellers have to stress about fulfilling and satisfying those appraisals. This is where a cash offer proves to be beneficial to the seller as there is no lender involved, and the buyer is less likely to ask for an appraisal.
• Contingencies – there is also a lot less need for the seller to cater to contingencies in a cash deal. This is because the buyer will not need a financing contingency which is usually for a mortgage loan, and if you are really lucky, then the buyer will not even ask for an inspection contingency either.
• Closing the deal –closing the deal on a cash basis is also very simple. Since the buyer does not have to wait to get a mortgage approval, the deal can be closed much quicker. Furthermore, there is also the potential of saving costs in terms of attorney fees and paperwork costs when considering a cash offer. If you are located in South Carolina and are interested in selling your house for cash, then you might want to check out we buy houses for cash in Greenville.
• Proof of funds – when it comes to a mortgage, the buyer is typically pre approved by the lender, which means that the buyer is already vouched for by someone implying that they indeed have the funds to pay for the financing, which may not be true or guaranteed. In a cash deal, however, this uncertainty is removed since the buyer is liable to provide proof of funds to the seller which can then verify it.
Pros of accepting a cash offer
• You may be able to avoid some appraisals
• The whole process is a lot faster and simpler
• No risk of financing failure
• Fewer contingencies
Although the cash offer seems like a favorable option, it is always wise to consider some possible drawbacks. Some of them are as follows.
Cons of accepting a cash offer
• You may miss out on other offers, which may be higher
• The buyer may not be screened carefully
Conclusion
Regardless of whether you are selling your house for cash or not, it is always beneficial to be aware of your possible options along with the advantages and disadvantages that come with it.
