If your home is distressed or severely in need of renovations, you may struggle to find a buyer. Even an experienced real estate agent can’t sell a home that traditional buyers can’t see themselves living in.
Selling your house for cash to a reliable and reputable distressed home buyer is a fantastic option for most sellers. You can get a sizable amount of cash to use for your next home while avoiding the hassles and delays associated with a traditional sale.
It’s important to understand the pros and cons inherent to the cash buying market. Here are the basics you need to understand to make an informed decision on whether to sell a house for cash.
Pro #1: Money Fast
Not having enough money for a down payment or monthly mortgage bills on your new home can quickly derail your plans to move. For most homeowners, the equity tied up in their old home is their only significant source of wealth. If that house doesn’t sell, they can’t afford to move on.
Selling your house for cash makes the process much faster, which is one of the biggest benefits of cash home buyers. Instead of waiting months for an interested buyer, you can reduce the process to 30 days or less.
Part of the reason the process moves so fast is that there are no lenders involved. A distressed home buying business like Meli has the cash on hand to buy the house from you in as little as seven days. Traditional sales involve mortgage lenders who need weeks to process the buyer’s application and deal with any questions or problems that arise.
Pro #2: Deal with Liens and HOA Fees
Depending on the exact specifics of your situation, you may be able to quickly sell your home for cash, even if there is a lien or overdue HOA fees. Although you need to resolve these issues before a sale can occur, an experienced and knowledgeable distressed home buyer knows how to cut through the red tape quickly and sometimes help pay for fees.
In many cases, you need to deduct at least some of the debt from the proceeds of the sale. A reputable and experienced home buyer who specializes in these situations will be able to give you a summary of options available to you.
Pro #3: Avoid Contingency Clauses
Traditional home sales have contingency clauses that allow a buyer to back out of the deal without penalty under certain conditions. Common contingency clauses include the discovery of a cracked foundation or other significant issues. Many contingency clauses also have a time limit, typically around three months, that allows the buyer to cancel their purchase if the sale is taking too long.
Cash buyers will do a brief inspection of the home, but they are usually buying on an as-is basis with the understanding that they will be on the hook for future expenses. Like you, they want to close the sale as quickly as possible so they can begin essential repairs and start looking for a buyer.
Pro #4: Escape Unfavorable Market Conditions
Buyers are usually looking for good schools, safe neighborhoods, and homes with modern floor plans. If your home is lacking in one or more of these areas, you might struggle to find a buyer for reasons completely outside of your control.
There may also be more sellers than buyers right now, creating a surplus of housing stock that’s difficult to stand out in. Selling a distressed home is difficult enough when market conditions are in the seller’s favor, but when demand is too low, or supply is too high, it becomes nearly impossible.
Selling to a cash buyer allows you to avoid dealing with these conditions and move on with your life. Florida cash home buyers can take your property no matter where it is, even if the local market in your city is weak.
Pro #5: No Rental Headaches
Some families try to get out of dealing with the sale of their distressed home by renting it out. However, this invites a huge range of potential issues. Distressed homeowners typically can’t charge as much in rent as more up-to-date properties, so you might not even make enough to cover your mortgage.
Plus, being a landlord requires you to either make ongoing repairs yourself or contract with a property management company, which often charges high fees. If one-time repairs are necessary to bring your property in line with local housing codes, you could end up with a bill of $10,000 or more before you can start to make any money renting.
It’s better to leave the house in the capable hands of a professional home buyer who can make the property live up to its potential and eventually sell it to the right buyer. You won’t even have to worry about the hassle of open houses.
The Downside: Less Money Overall
When evaluating the pros and cons of selling for cash, the only consistent downside is that you will receive less cash than you would on the traditional market. Although you’re dodging realtor fees and certain other closing costs, you’re also not receiving the full potential market value of the home.
However, not worrying about the headaches and hidden costs of a traditional sale makes this discounted price well worth it for many sellers. You can take the cash and immediately invest it in your new home instead of wasting time, energy, and possibly money dealing with your old house.
Your Local Distressed Home Buyer
Whether you’re holding on to a distressed home or trying to sell it on the open market, both options will eventually bring more trouble than they’re worth. Full-time professionals and parents don’t have the time to deal with all the possible problems that arise.
If you’re ready to sell a house for cash, call Meli Homes at (407) 338-4183. We have a knowledgeable and experienced team ready to serve you and answer all your questions even if you’ve never sold a home before.
This article is meant for informational purposes only and is not intended to be construed as financial, tax, legal, real estate, insurance, or investment advice. Meli encourages you to reach out to an advisor regarding your own situation. Please consult with your advisor when making legal or financial decisions.
Image Credits
https://unsplash.com/photos/tbUmoLalVpo
