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What are the advantages of selling a house for cash?
Now that you’re familiar with the process of selling a house for cash, should you do it? Here are a few benefits that make this approach enticing.
Fast and guaranteed closing
Across the board, the main draws of a cash sale are speed and certainty. There’s always a chance a financed deal could fall through if the buyer doesn’t get approval for the loan or if the appraisal comes in lower than the contract price — a long and frustrating process may take a seller back to square one.
“With cash, you can close fast without any hassles,” says Lange. “With a mortgage, lenders can take 60 days, sometimes more, to clear everything — there are a lot of hoops to jump through.”
Check out this table for a snapshot of how much faster each step of a cash sale moves compared to a financed sale.
| Steps | Typical number of days for a cash sale | Typical number of days for a financed sale |
| Prepping | 0 | 30 – 90 |
| Getting an offer | 1 – 3 | 30 – 60 |
| Closing | 7 – 14 | 30 – 60 |
| Total: 8 -17 days | Total: 90 – 210 days |
Less stress
Selling a house can be stressful, but when working with a cash buyer, many of the common headaches and uncertainties of selling a home — such as staging, showings, and appraisals — are off the table, which means a simpler, more straightforward process.
Reduced fees
Although an investor’s offer will likely be lower than what you could get in a traditional sale, this can be offset by the money you don’t have to spend on commission, concessions, and prep work.
“In a retail market sale, most of the transactional costs, such as agent commissions for both listing and buyer’s agents and closing costs for escrow, fall on the seller,” noted Johell Aponte, founder and acquisitions manager with Move On House Buyers.
“Plus, the seller is often asked to support buyers with closing cost concessions, pre-listing repairs and updates, post-inspection repairs, and possible extended hold times, all of which can add up to substantial costs.” With a cash sale facilitated by a house-buying company, you can avoid these expenses.
Flexible timeline
In addition to speed, a flexible schedule is another benefit of selling for cash. For example, if you need to close on your next home before moving, an investor or flipper will be more likely to delay possession after closing than a traditional buyer would.
Quicker path to your next home
Let’s say you’ve found the perfect home that checks off all the items on your list and is within your price range, but it’s getting a lot of interest and multiple offers. By taking a cash sale on your current house, you may be in a better position to secure your next home, because that seller won’t have to wait around for any contingencies or financing delays.
Zero repairs with “as is” sale
Some loan programs that a traditional buyer would use to purchase a home come with strict guidelines that can make fixer-uppers more difficult to sell.
“Many of the houses we purchase are not livable — the owners couldn’t get a loan even if they wanted to,” says Lange. “Sometimes the bank is knocking on their door, or there are eviction notices in the window. Cash gives them a way out.”
A cash buyer might make an offer that’s close to the list price, but then they often ask for pricey repairs at the inspection stage. When all is said and done, the final price might be up to 15% below fair market value.
Kevin Kendrick Real Estate Agent
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Kevin Kendrick Real Estate Agent at Keller Williams, Advantage III Realty
- Years of Experience 15
- Transactions 528
- Average Price Point $474k
- Single Family Homes 427
What are the disadvantages of selling a house for cash?
A cash offer isn’t always a silver bullet (no solution to selling your home is), so before you move forward, you should be aware of these common drawbacks.
Lower price
When selling for cash, all of that speed and convenience come at a cost: You’ll generally sacrifice a chunk of change on the sale price, as cash buyers are typically looking to pay below market value.
“It depends on the market hold times and costs, but sellers may expect to leave on the table anywhere between 8% to 15% of what they would have projected to get from a successful retail sales process,” says Aponte.
At the end of the day, investors are running a business — a low-margin one, at that — and they need to make money to keep buying homes. “Investors need to buy at a discount because they’re often putting hundreds of thousands of dollars into a property,” says Lange.
“They have to find a way to get value out of a purchase. Selling a home for cash should be a win-win for both sides. Both parties should feel comfortable with what they’re getting.”
