If you need to sell your house in Memphis, you’ve probably been thinking about what your options are to list the place. Should you sell by owner? Should you hire a top real estate agent? Or would it be better to sell your house to a cash home buyer?
The first two options would require you to get your house ready, including making repairs, decluttering, cleaning, staging, and adding some curb appeal to your home before putting it on the market. Once it is on the market, there is no way to know for certain when it will sell, but when that day does come, don’t forget you’ll have to pay agent commissions.
The alternative is to sell your home to a local Memphis home buyer instead and avoid the hassle and expenses associated with selling a house. But what are the advantages of selling a house to a cash home buyer? What’s the difference between selling a house for cash vs. mortgage financing? Are there any benefits or risks associated with selling a property to a home buyer? Isn’t a cash home buyer a house flipper?
Below we’ll answer all your questions, so you’ll have a better idea of what selling your house to a cash home buyer in Tennessee would look like. So let’s get started!
Advantages of Selling a House to a Cash Home Buyer
Ever wonder what all the hype is about selling a house for cash in Memphis? Well, there are actually several advantages to selling a house to a cash home buyer. Check out this list of advantages to see if any would benefit you.
Advantage #1- You Can Sell Your House As-Is
Homebuyers purchase houses in as-is condition. So if you have several expensive repairs that you need to make before selling your house, you won’t have to worry about doing any of them if you sell to a cash home buyer. Below are some examples of major repairs that home buyers won’t shy away from.
- Foundation problems
- Water damage
- Fire damage
- Termite damage
- Leaky roof
- Unfinished construction
- Condemned houses
- Vacant houses
- Ugly houses
- Distressed properties
Repairs alone can be extremely costly and time-consuming to make. If you’re in a hurry to sell your Memphis home and don’t have the budget to make repairs, then working with a cash home buyer may be for you.
Related Article: Who Buys Houses in Any Condition?
Advantage #2- They’re Familiar with Unique Selling Situations
Maybe you have a lien on your property, or you have a few code violations that you’ve never addressed, both of which are unique selling situations that traditional buyers aren’t familiar with. The good news is most home buyers have experience with special selling situations that would otherwise turn buyers away. Below are a few other examples of nontraditional selling scenarios that a home buyer is usually familiar with.
- Code violations
- Unpermitted work
- Title issues
- Hoarder houses
- Bad tenants
- Inherited properties
Working with someone that’s knowledgeable about these types of selling situations would be extremely helpful for everything to run smoothly.
Advantage #3- Home Buyers Can Move Quickly
Another advantage to selling your house to a home buyer in Memphis is that they can close quickly. Typically home buyers like Fair Cash Deal, for instance, can make you a cash offer for your home within 24-hours and close in as little as 7-days or longer if needed. Unlike traditional buyers, they can close when it’s convenient for you. This could be extremely helpful if you need to sell quickly for reasons like:
- You’re in pre-foreclosure
- You’re about to file for Chapter 7 or 11 bankruptcy
- You’re in forbearance
- You’re having trouble paying your mortgage payments
- You need to move quickly for a new job
- Your listing has gone stagnant
- You’re trying to sell during the worst time of year in Memphis (winter months)
- You’ve put an offer on another house and need to sell to close
- You just don’t want to wait for your house to sell
When you sell your house to a home buyer, you get a guaranteed cash offer and can close on your schedule instead of waiting around for your house to sell.
Advantage #4- Home Buyers Don’t Charge Fees
A huge advantage to selling to a cash home buyer is the fact that they don’t charge realtor commissions. Yes, you heard that correctly, most homebuyers don’t charge hefty realtor fees.
How Much Does it Cost to Sell with an Agent?
If you’re not familiar with how much typical agents charge for their services, we’ll explain. Generally speaking, if you were to use a listing agent, they would charge you 2.5-3% of the final sale price to sell your home. If the buyer were to use an agent to purchase your home, you’re looking at paying another 2.5-3% to the buyer’s agent. So total, you’re looking at paying 5-6% in agent commission when you officially sell your home. To put that into perspective, the average sale price in Memphis is $167,000, which equates to a commission of $8,350 to $10,020 you’ll pay in agent fees.
Related Article: Understanding The Costs of Selling Real Estate in Memphis
How Much Does it Cost to Sell By Owner?
But what if you sell by owner instead? Won’t you save on agent commissions? Yes and no. There are some benefits of selling a house by yourself, including saving on the cost of hiring a listing agent. But if the buyer still uses a realtor, you will still owe their fee of 2.5-3%. For many sellers, it’s hard to justify doing all the work to sell by owner with the potential of still paying an agent’s commission. Although it is less expensive to sell FSBO, if there’s a way to not pay a commission at all, most people would take advantage of that option, which is why selling to a home buyer is so attractive.
Still unsure about selling your home to a cash home buyer? Let’s go over a few more details to help you decide.
Difference Between Selling House for Cash vs. Mortgages
Is there really a big difference between selling a house for cash vs. a mortgage? Whether a buyer pays in cash or uses bank financing, the seller still gets paid the same way technically. But have you ever heard the saying cash is king? We’ll when it comes to selling a house, this definitely applies.
If you’ve ever applied for a home loan before, you understand that it can be a process. The bank needs to approve the loan, do underwriting, then there are home inspections and appraisals. All these things take time to do, which is why it can end up taking on average 30 to 60-days for a buyer using financing to close on a house.
When you work with a cash home buyer, you can bypass several steps in the process since they already have the cash to purchase your home. The risk is lower since the cash buyer isn’t subject to the bank’s loan approval. And since they have the funds already available, they can close in as little as 7-days instead of a month or two like a traditional buyer would need to close.
Benefits of Selling Your House for Cash in Memphis
At this point, the benefits of selling your house for cash in Memphis are pretty clear:
✔ You won’t have to make any repairs, you can sell your home in any condition
✔ You won’t have to make any renovations, declutter, clean, or stage
✔ You don’t have to hire an agent or list FSBO
✔ You can get a cash offer on your house within 24-hours
✔ You can close and move out on your timeline
✔ You don’t have to pay expensive realtor fees
✔ You get to work with a knowledgeable real estate professional
✔ You won’t have to deal with the hassle, expense, or uncertainty of selling a house
All of this sounds too good to be true, right? Is there anything else you should know before selling to a cash home buyer? Well, there are some common misconceptions people have about professional home buyers in Memphis. So to clarify, let’s break down some of the risks of selling your house for cash before getting too excited.
Risks of Selling Your House for Cash
Whether selling the traditional way or to a cash home buyer there is always some type of risk involved. When it comes to working with a cash home buyer though, these are the three most common risks you can come across.
Risk #1- Cash Home Buyers Don’t Need a License
Although this isn’t necessarily a bad thing, it means anyone can claim to be a home buyer. So you’ll just want to be cautious when you’re searching for a home buyer to work with. You don’t want to call a “We Buy Houses Memphis” sign on the side of the road. Instead, you’ll want to work with a home buyer who has a professional website, has information about their company and how it works, has been in business for several years, can give you an idea of how many houses they’ve purchased, and has positive client reviews online. If the home buyer can pass all of those qualifications and you feel comfortable working with them, then you may have found a winner.
Risk #2- Scam Artists can Pose as Home Buyers
Sadly, there are scam artists out there claiming to buy houses with cash. The best way to safeguard yourself from becoming a victim is to do your research. The internet can be a helpful tool to investigate a home buyer you’re looking at working with. A good indication that the home buyer is legit is if they are a BBB accredited business. So you’ll want to do a search on the Better Business Bureau website and see if the home buyer is an accredited business. If they aren’t listed, you may want to consider working with someone else.
Scam artists are smart and convincing, so be on the lookout for any of these three red flags:
- Red Flag #1
An indication the home buyer you’re working with could be a scam is if they answer the phone unprofessional. If they answer with a “Hello” and not “Fair Cash Deal, this is Jake, how can I help you?” then you may not be working with a professional.
- Red Flag #2
Another red flag is if the home buyer asks for any money upfront. A legitimate home buying company will not ask you for any money to make you an offer, and they won’t charge you administrative or processing fees. In a home buying transaction, the flow of money should always be from the home buyer to the seller, not the other way around.
- Red Flag #3
Lastly, another common way people are being scammed is when a home buyer says they live out of state or in another country, plan to move to the area, love your house, and want to buy it sight unseen. They say they want to buy it so badly that they’ll even send you a check right away for the full amount.
When the check arrives, you discover that it’s for more than the agreed-upon price. The buyer then admits to their error and tells you it’s an easy fix. All you have to do is send a wire transfer of the overage amount. Of course, they’re usually extremely apologetic and say this never happens, this must have been a clerical error. You being a good person, wire them the money. But after the money is sent you realize that the check was bad. You’re out several thousand dollars and of course, they are long gone.
A professional home buyer won’t ever offer to buy your house sight unseen, they will want to see your house in person or at the very least ask for a video or photos before making you an offer. They also won’t send you a check in the mail but instead, close legally at a reputable title company.
Yes, there are risks to selling to a home buyer, but not all home buyers are scam artists. You’ll just need to do your research and look for these types of warning signs before working with one.
Related Article: How To Avoid “We Buy Houses” Scams in Memphis
Risk #3- You’ll Likely Sell Below Market Value
A risk you do run into by selling to a home buyer is selling below market value. What exactly does that mean? When a home buyer makes you an offer for your house, they take into account what your property is worth in its current condition. So if you have some major repairs that need to be done, they will have to account for those in the offer they make you. For some people, this works out well, they don’t have to pay for expensive repairs and can sell their house right away and move on. For others, they are hoping to get as much as the neighbor down the street did but don’t realize how much money that neighbor invested into their home prior to selling.
Typically when a seller works with a home buyer, they aren’t necessarily expecting a large “windfall” on the property but rather appreciate that they can get a cash offer, can close quickly (no waiting for financing), and that no time, effort, or expense is required on their part to fix up the property or pay agent fees. So, if that’s what you’re looking for and you see the value in getting your house sold fast… then selling to a cash home buyer is a great option.
Cash Home Buyers vs. House Flippers
One final thing to talk about- the difference between a cash home buyer vs. house flippers. You’ve more than likely seen the shows on HGTV, showing a couple or mother-daughter duo who buy a house that needs a lot of work, they get the home for a good price, they make repairs and renovations, decorate and stage, and a couple of months later they sell the house for a profit. What was just described is a house flipper, and you just saw the glamorous side of the business. In that hour-long special, what they usually don’t show much of is the months of hard work, time, and money it takes to flip a house.
House-flipping is quite common and a great way for older homes to be renovated and then sold to a new homeowner. But some sellers don’t like the idea of selling to someone who doesn’t plan on living in the home and instead fixes it up then resells it for a profit- which is one way to look at it. Another way to look at it is, if you really need to sell your house and don’t have the extra time or money to make renovations yourself, then selling to a house flipper isn’t necessarily a bad idea. The house flipper can risk their money on fixing it up and the months of renovations. Instead, you can sell and move on.
So what is a cash home buyer compared to a house flipper? Cash home buyers in Tennessee are investors who buy and sell houses. They may do renovations to a property they purchase and then rent it out, or they may decide to resell. Cash home buyers do a bit of both, house flipping and hold on to properties as rental investments.
Whether you like being able to sell your house in as-is condition, or the fact that you don’t have to pay realtor commissions, or maybe that you can sell your house fast- working with a cash home buyer is a great way to sell your Memphis property. If you’d like to sell your house for cash fast, working with a local home buyer like Fair Cash Deal would be ideal. They are a BBB accredited business and have been reviving the Memphis community for over 11 years. They have purchased, renovated, and brought back to life 375 houses in the midsouth area and continue to invest in the community. Feel free to contact Fair Cash Deal to start the process of selling your house to a cash home buyer today.