Sell Your Home for Cash? Here's 3 Things You Need to Know

Have you ever received a mailing, text or call from a buyer offering to purchase your home in cash? It sounds like a great idea. You will save money on realtor fees, won’t have to deal with inspection and appraisal contingencies or show your property.

While a cash buyer can make sense in certain scenarios, here are a few things you should know before you commit to working with a cash buyer:

Not all cash buyers are created equally.

Most cash buyers are not actually purchasing your property themselves. Defined as wholesaling, the “buyer” is planning to sell the contract you signed to another buyer and make a margin onthe difference. This amount is called an assignment fee and is the difference between what you agreed to sell for and what the buyer is charging the next buyer.

It may make the most sense for you to work with a wholesaler IF your house needs a major rehab. If that is the case, you may be better off working with a flipper or rehabber who has the cash funds to close on your property as-is. This can maximize returns by reducing the need for you to invest in improvements with your own funds.

QUESTIONS TO ASK THE CASH BUYER:

-         Are you purchasing my property to rehab yourself or do you plan to wholesale it?

-         If you are wholesaling the property, are you willing to put more earnest money down in case you cannot find a buyer and cannot close?

-         How many buyers do you have on your personal buyers list?

-         If you are purchasing for cash, can you provide proof of funds?

Current market demand

In the Minneapolis-Saint Paul market and nationally demand for nearly all property types is incredibly strong due to limited supply. Prices are at all-time highs and most properties are selling after a few days on the market, shorter than we have seen historically.

‍What condition is your property in?

If your home does NOT need major cosmetic,structural or mechanical updates then you are likely better off listing your property on the MLS. Most sellers are receiving multiple, competitive offers above list price, often driving up the final sale price. Even with realtor fees, you will be netting more money overall.

Consider the condition of your property and discuss all your options for selling before you sign a purchase agreement with a cash buyer. You do not want to leave money on the table!

Interested in learning what your home could sell for? Contact us today!