When you are selling your house, a buyer can use a no-financing clause or an all-cash-offer clause. In both cases, it implies that the buyer is not considering ‘getting a mortgage’ to be a part of closing their deal. Instead, they are planning to either finance the deal themselves or have a private/hard money lender financing them.
This is a great opportunity for sellers. Honest and committed real estate agents would be happy to tell you that the highest offer is not always the best offer in real estate. In fact, the cleanest offer is the best offer you can get when you are looking forward to sell your property.
Why is an all-cash offer better?In some cases, a buyer is fully qualified to purchase a home initially with a loan. However, several problems may arise during the loan process.
One of the biggest problems with financing is the appraisal. The most common method involves the dependence on comparable sales which is also referred to as the comparative sales method. This requires analyzing various properties to compare them to the property in question by assessing crucial factors including the features, amenities and location.
The home may not qualify, or other conditions for loan approval can get in the way of a buyer obtaining financing. If a home does not appraise for the purchase price, then the lender is not going to loan more than the appraised value. Although there are a few other options to manage a low appraise, such as when the buyer coughs up more funds or the seller cuts down the selling price, it can also result into a cancellation of the contract and possibly with an argument over the good-faith deposit.
In an “all-cash offer” the buyer provides his own financing, either his own cash or a private loan. In either case the money is not contingent on appraisal or credit approval. This means that the offer will not fall apart at the last minute just because the buyer didn’t get pre-approved or the bank requires the buyer to use money he or she doesn’t have.
This is why such a deal takes most of the risk out of the contract. It is fairly common to come across deals where sellers prefer a lower priced all-cash offer over a higher priced offer that comes with conventional financing.
As soon as any contingencies have been fulfilled; closing will usually take place in fewer than 30 days. Naturally, the faster a deal closes; the quicker a seller gets his money into his pockets. Since time is one of the main concerns of a typical seller, it is usually in his or her best interest to opt for an all-cash offer.
An all-cash offer is more attractive since it closes quickly and doesn’t require appraisal of approval, so sellers can get a better deal out of it with less risk.
Bottom LineAlways work a professional real estate business or a licensed realtor who you can trust. These professionals possess the necessary experience to help you achieve your major goals in selling your house, selling quickly and for the best value.
People who are about to sell a home or property should know that there are quite a few steps involved in the selling process. Moreover, there are costs that you need to incur for renovating or repairing a property.
Here are a few important things to consider when you are selling your property.
Finding the Right Agent
Professional real estate companies and realtors possess a solid experience with an intimate knowledge of the markets in which they list their homes. Even a newly established real estate company has a couple of seasoned realtors who have a string of successful clients to prove their credentials.
It is important to get in touch with the best realtors since they can offer expert and valuable advice on what is trending in the real estate market.
In a typical sale, the seller has to pay the commission fees for the listing agent and the buyer’s agent. This fee is about 6% of the sale price, generally divided equally between the buyer’s agent and the listing agent. If you think you can save money by closing your selling deal without a realtor, you are still likely to pay the 3% commission charges of the buyer’s agent.
Home Preparation and Staging
Staging is one of the most important parts of preparing a property or home for sale. Not only, but it is also recommended; prepping your property dramatically improves your chances to get the most out of a deal. That's why 38% of seller’s agents recommend doing it, and more than 75% of buyer’s agents believe it makes it easier for the buyers to envision a house as their potential home.
Repair and Renovation
Once you have agreed to an offer, the buyer is likely to get your property checked for any damages. Most properties that have been lived in require minor fixes. The buyer either asks for an amount to compensate for the estimated cost or ask you to make the repairs yourself.
All repair jobs range from a few hundred dollars to over thousands of dollars for major repairs such as roof repairs or foundation cracks.
You may also want to add more to a property by adding a bathroom, bedroom or living room to a home. Research reveals that buyers can recover up to 80% of the money spent on home renovations. Adding a porch or swimming room also increases the net worth of a home.
Setting Realistic Goals
A few real estate companies promise overly optimistic outcomes. The best realtors paint a realistic picture of what a seller is likely to accomplish out of a selling deal. Never choose a real estate company that gives your false hopes and does not offer an accurate picture of the real estate market.
Qualified real estate professionals possess a deep understanding of how the rules and regulations work in your community. It is important that you hire the best real estate company to sell your property for making the most profits.
Kyle is a real estate agent/real estate investor in the Stockton area in California. He specializes in getting homeowners and landlords out of tough situations by buying their properties quickly and with cash and then remodeling the properties for a profit.