Selling your house to a cash buyer is the new thing. Many home sellers are using this modern approach to sell their Memphis houses to a cash buyer for their simplicity and speed. So if you’re needing to sell your Memphis home you might want to find a cash buyer too.
But what makes selling to a cash buyer so amazing? How does the process even work, and are there fees involved? What is a cash home buyer anyway? And is it truly better to sell a house for cash or to list with a realtor?
Below we’ll break down all your questions and provide you with some clear answers so you can decide if selling your house to a cash buyer is right for you!
What is a Cash Home Buyer?
A cash home buyer is an umbrella term for several different cash buyers out there. However, what they offer is basically the same, which is cash. And since they have the money on hand, they can buy a property without the help of a loan or mortgage.
So, to be considered a cash buyer, the person must have the money available when putting in a cash offer.
A cash buyer also doesn’t rely on the profits from selling their own personal property to acquire another, similar to how a traditional buyer purchases real estate.
To better understand, below are some of the most common cash buyers you’ll come across.
- Real Estate Investors– They “buy and hold” property with the intent to hold on to the home for an extended period of time, usually to rent it out.
- House Flippers– They usually buy houses that require major repairs and then will make improvements to the home before selling it for a profit. This provides sellers with a way to sell their damaged property without having to make costly repairs themselves.
- iBuyers– They are instant buyers that make immediate offers on houses online. The homes they buy are typically in good condition, meet their criteria, and are in popular real estate markets.
- Cash Buyer– This is a wealthy individual who has the funds on hand to purchase a property with cash. Usually, cash buyers acquire real estate in NYC, Los Angeles, Miami, or Dallas but may be found in other major real estate markets.
Is it Easy to Sell Your House to a Cash Home Buyer?
Absolutely! That’s why more and more homeowners are choosing to sell their homes this way. The hardest part will be finding a reputable “We buy home Tennessee” company – which will let you in on a few tips later on so that you can find the best cash home buyers in your area.
What is the Cash Buyer Process for Home Sellers?
Depending on the type of cash buyer you end up working with, the overall process can vary some when it comes to getting an offer and closing, but you can expect to go through these main steps:
Step 1: Find a Cash Buyer
There are several ways you can go about finding a cash buyer for your Memphis home; just make sure you don’t call a random sign on the side of the road that says “We Buy Houses, Fast Cash.”
Typically the best way to find an investor or cash buyer is to do a simple search online for companies that buy houses in Memphis, this should pull up several results, and you can start a vetting process.
Ideally, you want to work with a BBB accredited business with positive reviews, personal photos of the buyer, and someone you feel comfortable working with after talking to them. Checking for these things and talking to the cash buyer will help safeguard you from working with a scammer.
>>Related Article: How To Avoid “We Buy Houses” Scams in Memphis
Step 2: Request a Cash Offer and Review It
Once you find a cash buyer you’d like to work with, you’ll request a cash offer for your home. The cash buyer will likely ask questions about your property like:
- The address
- The square footage
- The number of bedrooms and bathrooms
- The age of the home
- The overall condition of the property
- If any repairs or updates have been made or are needed
They also may ask you to schedule a video walkthrough, send photos, or see the house in person to get a better understanding of the property. After that information is gathered, they’ll present you with a free cash offer in writing, usually within 24-hours. The offer is to buy your house in as-is condition, and you should be under no obligation to accept.
After you receive your offer, you’ll want to review the contract. Most cash buyers have no issue with you taking the offer to your attorney to look over.
If you were to get an offer from an iBuyer, the process is a bit different; usually, you’ll receive an offer pretty quickly after submitting your home’s information, as long as your property meets their buying criteria.
However, the offer is contingent on an inspection of the home’s condition and if any repairs are needed. Those costs might later be adjusted after they evaluate the house. So your initial offer may be reduced.
After receiving your final offer from the iBuyer, it wouldn’t hurt to take it to your attorney to review.
Step 3: Accept the Cash Offer and Start Packing
After accepting a cash offer, the rest of the transaction is very similar to a typical home sale. The contract, which is usually prepared by the buyer, should include the purchase price, the amount of the deposit, and the closing date of the seller’s choosing. Finally, the seller can choose to sign and accept or have an attorney review the terms.
Some cash buyers will waive the home inspection, while others will still opt to get one and may negotiate the contract price to cover any required repairs.
Because the cash buyer won’t be working with a lender, you’ll likely shave time off during the escrow period in which the house would otherwise need to be professionally appraised in a conventional sale, as well as the time it would take for the buyer’s loan to go through.
However, once everything is signed, you’ll be able to focus on packing your personal belongings and finding your next home.
Are There Fees or Taxes when Selling to a Cash Home Buyer?
When it comes to selling to an investor or a house flipper, they typically don’t charge service fees or agent commissions. Agent fees traditionally cost 5-6% of the final sale price. So the offer you receive shouldn’t have those fees. When it comes to closing costs, those typically include property taxes; however, those are negotiable if you sell to a cash home buyer.
iBuyers, on the other hand, do charge service fees. Unlike investors and house flipping companies, iBuyers typically charge service fees; these fees can range from 5% up to 14%.
You also would be responsible for some of the closing costs, which usually come out to 1% of the final sale price.
>>Related Article: Do You Pay Taxes When You Sell A House In Memphis?
Is it Better to Sell a House for Cash or with a Realtor?
Excellent question-That all depends on what you’re trying to get out of your home sale. If you’re looking to avoid making costly repairs and waiting weeks or months to receive an offer on your house, then you’ll appreciate all the benefits of selling your house for cash.
However, selling your house with a realtor may provide you with a better offer on your home, but it could take weeks or months to find a buyer, require you to make repairs or improvements, and be at the mercy of home inspections and buyer contingencies. And don’t forget once your agent sells your home, you’re looking at paying 5-6% in realtor commissions (split between buyer and seller’s agents) and 2-4% in closing costs.
This probably leads to your next question: is selling your house by yourself a better option? It can be from a financial standpoint; instead of paying a full agent’s commission, you would pay 2.5 to 3%, which is the buyer’s agent’s fee.
However, you’ll take on the burden of being the listing agent for your own home, which includes the same waiting time, repairs, home inspections, and buyer contingencies.
Not to mention, you’ll be handling phone calls, figuring out a competitive listing price, a marketing strategy, showings, and open houses, negotiating, and much more.
Most sellers just don’t have the time, money, and energy to take on this role, but if you do, that’s great, and there is nothing wrong with trying.
>>Related Article: FSBO Checklist
If you’re excited about all that a cash buyer has to offer and are ready to take the next step and find a reputable home buyer to work with, Fair Cash Deal comes highly recommended and is BBB accredited.
They are a top homebuyer in the Memphis area and are a local family-owned business. Rashard and his team provide solutions to homeowners dealing with unique selling situations, whether going through a foreclosure, issues selling a property, or just need to sell and relocate quickly.