Have you received a cash offer on your house and aren’t sure what to do? We can help.
When you receive a cash offer, it means that the buyer has cash-on-hand and wants to purchase your home without a mortgage. The major benefit to accepting a cash offer on a house is that you won’t have to worry about the deal falling through like you would if the buyer has to take a mortgage from a bank.
With a cash offer on a house you also won’t have as many delays like you do when the buyer is relying on the speed of a lender where red-tape can cause “sticking” points. And when you get a cash offer on your house, the money will be transferred directly to you once your closing services have been finished. But there are risks with taking cash offers.
Not every cash offer will be legit, and many deals can fall through putting you in a bad spot if you need to sell quickly. Whether you received a pre-foreclosure notice from the bank, or you need to relocate quickly for work, be careful who you sell to.
To determine if a cash offer on a house is from a legit buyer, ask these questions:
- Do you have an office I can visit? (if they are a company)
- Can you share satisfied homeowners that I can contact who have sold to you in my area?
- When will you be coming to tour my home? It is rare a legit cash offer buyer will purchase a house without seeing it first.
- What will you do with my home? This question will catch scammers off guard, or you’ll get a vague response. A real buyer will answer with a very clear and actionable response.
There are a lot of reasons someone will make a cash offer on a house. So don’t be alarmed if you get one, even if your house is not currently for sale.
Previous owners, or people who lived in your home as a child may want to raise their kids or retire in the home they had incredible memories in. Experienced homebuyers know that cash offers make the sales process easier, so they may make a cash offer to gain the upper hand when others have made offers.
Real estate investors will know the area and if they think your home is prime for a fix and flip, they’ll pay cash to get in before the market begins to spike. And when a homebuyer that plans on living in the house pays cash for the one they want, they’ll avoid a real estate agent who would charge a fee for finding the home. This saves the home shopper money, it’s as simple as that.
The process to sell a house for cash is fairly straightforward and usually takes two weeks or less.
- Place your house for sale (usually “as is”) and a buyer places a cash offer.
- Once offers come in, review the offer (which includes the contract price and terms) and decide whether to accept.
- Once you’ve accepted the offer, have the buyer show documentation that they have the funds to complete the sale.
- The last step is for the buyer to have inspections and appraisals completed, as well as a title search done so you can go to closing.
All of this can take place within 10-14 days. If everything checks out, you’ll have your funds wired to you asap.
While there isn’t as much paperwork with a cash offer, there is still some, including:
- Final closing instructions telling your escrow company the process they’ll follow to complete your closing.
- The HUD-1 settlement statement that is required by federal law.
- The certificate of title that states you have the right to sell the property.
- The title deed that transfers ownership to the new owner.
- If you have a mortgage on the property, you’ll need your loan payoff statement showing how much you still owe to your lender as of closing day.
- On the mechanics liens document, you swear that there are no liens on your property from contractors or laborers.
- The bill of sale that includes any additional negotiated items.
- The statement of closing costs.
- The statement of information where you swear that you are who you say you are.
A cash offer on a house is pretty common and has many advantages for you as a home seller. Receiving cash offers on your house can also be a sign your property values are about to rise. Whether you’re actively selling your home, or randomly got a cash offer, now you know why someone makes a cash offer on a house and how to tell if they are real or a scam.