The situations that home sellers find themselves in are as varied as sellers themselves. With that said, most sellers will find that using the traditional sales approach works well and helps them meet their objective of getting maximum value for their home. But there are many times when a less traditional method for selling your home might be better. Typically this is the case when a seller has another primary objective besides getting the highest offer. In this article, I will cover those situations in which a cash offer is generally the best solution.
The seller that needs to move quickly often cannot wait for the process of selling their home to a buyer that requires bank financing. Buyers that are “pre-approved” still require at least 4 weeks for the bank’s final approval and funding. Further, the lending standards have become so tight that over 30% of 2012 sales transactions in CA never make it to the finish line. When this happens, the seller has to start over and the process can become painfully long. In addition, when a transaction falls thru there is typically a negative impact on the final sales price. For sellers that need to sell in less than 4 weeks, they have one choice, which is to sell to a cash investor that does not require bank approval. It’s the only way in today’s market.
What about the seller that has a physically distressed property? Banks are reluctant to finance homes that are in poor condition. Whether a house is inhabitable, and thus financeable, is a subjective matter. It is important to note that a house in dis-repair will increases the risk of a delayed sale, and possibly no sale at all. Like the situation above, IF the bank can’t provide financing, the seller is left with one option to sell….a cash buyer.
What if the seller has inherited the property or is a landlord that does not live in the area. It’s possible to use a realtor, but this situation makes it more challenging to coordinate the sale. A cash buyer will make the transaction easy to execute. Generally these offers are made without finance and appraisal contingencies. Inspection contingencies are normally short, because investors have the right resources and experience to get inspections done fast. Most of these offers are done “as is”. No matter what, with the right investor, a cash offer is fast, easy and provides maximum flexibility.
So these are just a few samples of the scenarios where cash is king. In coming blogs, I will discuss other strategies that sellers might use in other common scenarios