If you’re selling a home during this pandemic, chances are good that some of your buyers will be all-cash. That’s because, even though mortgage rates are at a historic low, it is still possible to purchase property without financing through the bank. This has made all-cash offers more attractive to buyers in many markets. In fact, a new report by real estate brokerage Redfin shows that the share of homes sold to cash homebuyers rose to its highest level in nine years in April 2023.
As mortgage rates rise, more buyers who can afford to pay in full will likely be attracted to a cash offer, making them a bigger force in the market than usual. It’s also worth noting that many buyers who are buying for all-cash are not typical homebuyers, including investors and developers. The majority, or 23 percent, are white, while black and Hispanic/Latino buyers make up 15 and 8 percent of all-cash homebuyers, respectively. In addition, some companies are helping prospective buyers with no credit or bad credit make all-cash offers.
When you’re selling a home to an all-cash buyer, the transaction typically goes much smoother than if you’re selling to someone who is financing their purchase through a mortgage. This is because there’s no risk of a mortgage falling through at the last minute, or a buyer backing out after a home inspection or other issues that can sometimes pop up.
In addition, closings with cash buyers happen faster than with mortgage-backed deals because they don’t have to wait for mortgage underwriting and approval. While you may still have to pay fees like title insurance, escrow and property taxes, these can be lower than with traditional closings.
One drawback of working with all-cash buyers is that they tend to be less flexible than typical homebuyers. This is because most of them are buying the property as an investment and have no intention of living in it. This can make it difficult to get your property into a desirable location or find a buyer who is willing to take the time and money to fix it up for a long-term resident.
The most important thing to remember when dealing with a cash buyer is to work with an experienced, reputable real estate agent who understands how to negotiate with these buyers. They’ll be able to help you determine the value of your property and guide you through the process of getting it ready for sale on the market. They can also provide you with a list of trusted cash buyers and assist you in finding the right match for your property. They can even help you with the paperwork. This is particularly important if you’re looking to sell your home quickly. For example, some companies that buy houses for cash will even handle the entire escrow process on your behalf. This can be an ideal solution if you’re on a tight timeline and need to close fast.