Pros and Cons of Selling a House to a “We Buy Houses For Cash” Companies

If you happen to be selling a home in a hot seller’s market, you probably won’t have much trouble selling it the traditional way, mainly if the inventory is low. 

This is because plenty of other home buyers are likely competing to get a home. 

The sheer volume and need for a house could drive home buyers to compete for your home, leading to a bidding war. 

This could still be the case in plenty of hot seller markets, such as major cities in California, Utah, Nevada, and Idaho. 

On the other hand, if you reside in a city where the buyers have the upper hand, you may have trouble selling your house the traditional way.

 Unless your home has some unique features or is located in a prime school district, you may have to shell out a lot of money to fix up your house to get it to sell. 

But with the state of the economy being so unstable lately, coming up with the extra money to invest in your home just to sell it may not be easy. 

So what can you do when your house won’t sell the traditional way? Well, you certainly don’t have to sink plenty of money into your home to get it to sell. 

As a matter of fact, if you work with a “we buy houses for cash” company, you won’t have to sink any money into your home at all. Instead, these companies give you cash for your home “as-is.” 

This means whatever condition your home is in, they will assess the value and pay that for your home. 

They may also subtract the costs it will take for them to fix up your home to get it in sellable condition. 

In some cases, you may receive your money in less time than it takes to sell a home, typically under a month. 

But the process of selling a house for cash has its advantages and disadvantages. Here are some pros and cons of using this method to sell your home.

No Need To Stage A Home

When selling a home for cash, you won’t have to fix your home up for the property agent. You may not even have to clean it up since they will purchase your home “as-is.” 

There is no need to do any showings to potential buyers because there is only one buyer you are working with. That is the company that will buy your house directly for cash. 

So you don’t have to determine which parts of your home would be ideal to remodel to give you the most bang for your buck. Nor do you have to change the fixtures on your cabinets or consider getting new, energy-efficient appliances. 

When selling to these companies, you only need to give them access to your home so they can evaluate it and assess its value. In most cases, they will provide an offer on the spot. 

It’s a Quick Way to Sell Your Home

Since they will provide an offer on the spot, how quickly you accept the offer will start the process of getting your money to you. 

Some cash home buyers may be able to provide you with cash in as little as a week. Others may provide it within two to three weeks. 

In any case, the “closing” process with such companies is much quicker than traditional home buying. 

If you’re lucky to live in a city that’s a hot seller’s market and the homes are in high demand, you may be able to sell your house in about 30 days. But on average, this process could take up to 60 days. 

This is because your closing is at the mercy of traditional financial companies that need to do plenty of investigating before they offer money to buyers for closing. 

They may find problems during the underwriting process on the buyer’s side. Or they may find trouble with the home inspection for your home. 

Such findings could delay or kill a real estate deal, causing you to start at square one with a new buyer pool. Selling your home for cash eliminates the long, drawn-out process of a traditional closing. 

No Hiccups In the “Closing” Process

When selling your house for cash, you’ll simply wait for your cash payment. You won’t have to go back and forth with the buyer about issues with the house. 

Nor will you have to negotiate to fix up the house with the buyers. Most importantly, you don’t have to dread the home inspection report revealing any problems that could kill the deal. 

All you have to do is accept the property agent’s offer on your home, and you will start the closing process. They will work quickly to secure the funds for you in just a few weeks. 

The Process Is Easy

Another positive thing to note about selling a home for cash is that the process is typically an easy one.

 Once you decide to sell your house for cash, it’s just a matter of meeting with the company you want to work with, assessing your home, and receiving an offer.

 Since most offers are made on the spot, you will probably know the same day you schedule the “showing” how much money you will get for your home. 

After accepting the offer, the rest is about the logistics of receiving the cash, which could take up to three weeks. 

Whether you need the money quickly to move to another house or relocate to another city quickly to take a new job, selling your home for cash eliminates traditional real estate hassles. 

It’s a Way to Guard Against Foreclosure

One of the main reasons these types of companies started was to help customers with distressed properties avoid foreclosure. Their business model has expanded since its inception. 

However, this segment of home sellers is still a large part of their business. So, if you happen to be a seller facing foreclosure on a home, this could be a way to avoid it and minimize the chances of it hitting your credit report. 

While there are many positives associated with selling your home for cash, you have to remember that there are several negatives. 

So before you rush to decide either way, consider these disadvantages of selling your house for cash. 

You’re at the Mercy of the Cash Company’s Timeline

If you are ready to sell your home quickly and get out of dodge, selling to a cash home buyer is a good idea. However, what if you simply want the money but need time to figure out your next move? 

In a traditional home sale, you may be able to negotiate with the buyers when you can leave the property. 

For instance, you may need more time to stay in your home while you close on another house somewhere.

 Or you may need ample time to move. With cash home buyers, you will need to leave when they’re ready to take possession of the home.

You May Not Make As Much Money On Your Home As a Traditional Sale

Cash may be king, but selling for cash isn’t always the best solution when it comes to selling a house. 

While you will get a guaranteed amount on the sale of your home, this may not be the big bucks you expect. After all, you are selling your house “as-is.” 

So, cash home buyers will provide you an offer based on its value, minus the fixes they will need to make to get it in sellable condition. 

You may get between 50 and 70 percent of the home’s value when selling it for cash. 

But within a traditional home sale, you may be able to increase your home value and sell well over the asking price. 

There May Be Hidden Fees

Free cash offers may sound great, but all that glitters isn’t gold. Having the opportunity to sell a house quickly, especially when it is a burden on your finances, is a great option. 

But don’t be so quick to sign on the dotted line. 

One major drawback of cash offers is that they may come with hidden fees. 

These fees could be as high as 6 percent, depending on what type of cash buyer you choose. 

There Won’t Be Anyone Working In Your Best Interest

When working with a traditional real estate agent, this person works for you and represents your interest. 

So, they will try to ensure you are getting the most out of the deal and not being short-changed by the buyer. However, in direct cash deals, there is no one with a vested interest in your property but you. 

Cash home buyers are a business, and they are trying to get the best deal for your property. 

So you run the risk of them lowballing you on the value of your house. 

Ultimately, it’s up to you to accept or decline the offer. But know that they won’t have your best interest at heart. 

You Could be Scammed

While there are many legitimate cash home buyers, keep in mind that there are a few who are operating that aren’t as trustworthy. Some are outright scams. 

So, you’ll need to be on the lookout for companies like this that don’t seem legit. Here are a few ways to know that the cash home-buying company you are working with could be a scam.

• • They don’t provide a cash offer in writing.

• • You have to pay application fees upfront.

• • You become a victim of equity skimming in which your property is stolen from you legally.

• • The company wants your title signed over before they sell the property.

Final Takeaways

There are some great things about being able to sell your home for cash. Unfortunately, there are also some bad things. 

When searching for a cash home buyer, it is a good idea to research and get the best offer possible. Avoiding anything that seems like a scam is also a good idea.