COVID 19 Update: We are still buying homes for cash!

Sell My Home For Cash? How To Know If It's The Right Decision

December 17, 2020

Sell My Home For Cash? How To Know If It's The Right Decision

Traditional home selling in California (and across the United States) is primarily conducted using real estate agents, loan underwriters, banks, escrow companies, and many other 3rd parties and agencies. All of these real estate professionals charge significant fees for their services, and in the case of real estate agent commissions, these fees are paid by the seller of the home, AKA: YOU! What many homeowners don’t realize is that not all home sales require these third parties, or even make sense for the seller.

Depending on your situation, an all cash offer on your home may actually make more sense, and keep more dollars in your pocket when it’s all said and done. But how does the average homeowner know if this makes sense, or is right for their individual situation?We’ve created a simple guide for the decision making process, and explain which factors a homeowner should consider before selling their home for cash, or through a traditional sale.

When making a choice on whether to sell for cash, a few key factors must be considered by the homeowner considering a cash offer for their home.

  • Condition of the property being sold

  • Financial situation of the homeowner

  • Personal affairs of the homeowner

With these 3 key factors in mind, any homeowner can make a sound decision on whether accepting a cash offer makes sense for their situation.

Let’s consider factor #1 - condition of the property.

Condition of the property is a major factor when deciding whether to accept an all-cash offer. If the property being sold checks the boxes for any of the following, an all-cash offer might actually be the best way to go. Ask yourself the following questions:Is the property older with out of date design elements, features, fixtures and appliances?Is the property’s plumbing or electrical systems out of date or malfunctioning, and in need of major repair?

Is the interior or exterior of the property run-down, damaged, or in poor overall quality or condition?

Is the property facing major structural issues with the foundation, roof, whether it be from normal wear and tear, or poor quality construction or additions?

If you answered yes to any of the above, you are likely the perfect candidate for an all-cash offer on your home.Buy why?

Well, the answer is simple - and it all comes down to a simple cost-benefit analysis.All of the above factors are extremely costly to fix, and require major capital investment, and that’s all before your home is even on the market! Sellers are likely to shell out anywhere from $25,000 - $250,000 in order to get their home back into selling condition.Everyday home buyers are not willing to accept a home with a damaged foundation, or collapsing roof.Similarly, a home with appliances and fixtures from the 1980s, all in need of replacement will scare away most home buyers.Just because you are OK or accepting of the home’s condition, chances are, a regular home buyers will not even take a second look at your property. This means that your home could sit on the market for months, or even a year before you get a single offer, and in many cases, those offers will be comparable to the types of offers you could get from all-cash buyers. Don’t forget - when you sell your home with a real estate agent, the agent commissions come out of the proceeds of selling the home. That’s right - you, the seller are responsible for all agent fees. This means that, in a state like California, you can take 6% off the sales price before getting paid.Furthermore, if the bank or lender decides that the condition of the home is too questionable or risky to lend for, they may simply deny the buyer’s loan application, leaving you back at square one.It’s very possible that you could spend more time and money trying to sell your home with a real estate agent than if you accepted a simple cash offer for the property as-is.

Now, what about factor #2 - your personal financial situation?

A full cash offer with a quick close might be the absolute best decision you could make if you are facing any kind of financial stress. The types of financial pressures a buyer may face could be stemming from, but not limited to:

  • Delinquent or past due taxes

  • Delinquent or past due mortgage payments

  • Personal bankruptcy 

  • Recent divorce settlements, child support, or alimony payments

  • Job loss or inability to work

The above factors, especially when combined with any factors from #1 make you the perfect candidate for an all cash home sale. Not only can an all-cash offer help you avoid foreclosure, which would destroy your credit, it may also provide an outlet from your dire financial woes, and help you stay solvent and up to date on all of your bills and financial obligations. It can be a major win-win on many fronts for the seller.

Last but not least, factor #3 - life changing events.

Perhaps you’ve recently divorced, and have a mountain of legal fees and new financial obligations to your former spouse or children.

Or maybe you’ve faced an unfortunate and unforeseen accident that results in steep and extensive medical bills.

Or it’s possible that you’ve had an unexpected loss of employment, or your employer is moving out of state, or you’re in the military and you’ve suddenly been deployed to a new location, and you are forced to move at the drop of a hat.

These scenarios are, unfortunately, all too common, and often do not allow for the time needed to make a traditional sale. Again, if your home isn’t in great condition, this makes it exponentially harder to sell the house quickly with a real estate agent.

According to Zillow, the average home sale takes anywhere from 65-93 days. If you need to leave in a week, that timeline is literally impossible, unless you look for cash offers with fast closing times. Even the most qualified buyers will not be able to meet these strict timelines.

In summary, there’s not a one size fits all approach for deciding whether to seek or accept an all-cash offer for your home. Many factors come into play, and each personal situation is different.

One thing to keep in mind, is that inquiring about a cash offer is 100% free, and you have zero obligation to accept. So, we always suggest at least seeing what you can get for your home, as it might be the perfect option for you.

Any questions? Feel free to reach out through our easy to use form. We can make a cash offer on your home often within 24 hours! Don’t wait any longer - find out what your home is worth today! You may be surprised at the offer you receive.