Selling a home can be complex, and distressed homes, also known as fixer-uppers or distressed properties, are often sold at a lower price than their market value. These properties usually require significant repairs or renovations and may have other issues, such as liens or unpaid property taxes. Because of their condition, distressed homes are difficult to sell, and traditional real estate methods may not be effective. One solution to selling a distressed property is to make a cash offer.
Let’s take a look at some pros and cons of getting a cash offer on a distressed home.
Selling a distressed home can be a time-consuming process. Traditional real estate sales involve multiple parties, such as real estate agents, appraisers, and lenders, which can cause delays in the sale. With a cash offer, the closing time can be significantly reduced. The buyer does not need to go through the lengthy loan approval process, which can take several weeks or even months. Instead, the buyer can close the deal quickly, sometimes in as little as a few days. This can be a significant advantage for sellers who need to sell their home quickly due to financial difficulties or other reasons.
Distressed homes usually require significant repairs and renovations. These repairs can be costly, and many buyers may not be willing to purchase a property that needs so much work. With a cash offer, the buyer does not require the seller to make any repairs.
The buyer is willing to purchase the property in its current condition and will take care of the repairs themselves. This can be a huge relief for sellers who do not have the funds or resources to make the necessary repairs.
Traditional real estate sales often include contingencies, which are conditions that must be met before the sale can be completed. These contingencies can include home inspections, appraisals, and loan approvals. If any of these contingencies are not met, the sale may fall through. With a cash offer, there are fewer contingencies. The buyer does not need to have the property appraised, and they do not need to go through the loan approval process. This makes the sale more likely to go through, and it can provide the seller with greater certainty and peace of mind.
When selling a home through traditional real estate methods, the seller must pay a commission to the real estate agent. This commission can be as high as 6% of the sale price, which can significantly reduce the seller's profit. With a cash offer, there is no need for a real estate agent, which means there is no commission to pay. This can result in a higher profit for the seller.
Distressed homes can be difficult to sell through traditional real estate methods. Even if a buyer makes an offer, there is a risk that the sale will fall through. The buyer may not be able to secure financing, or they may back out of the deal due to the property's condition. With a cash offer, the risk of the sale falling through is significantly reduced. The buyer has the funds available to purchase the property, and they are willing to do so regardless of the property's condition.
Typically, the sale price for most cash offers and cash sales is going to be lower than a mortgage-backed buyer or traditional offer. However, many sellers see the lower offer as a fair trade for a quicker and easier sale of their distressed home.
In conclusion, cash offers are better for distressed homes for several reasons. They offer a faster closing time, no need for repairs, fewer contingencies, no real estate commission, and a reduced risk of the sale falling through. If you are trying to sell a distressed property, a cash offer can provide you with a simpler, more efficient, and less stressful way to sell your property. However, it is important to keep in mind that cash offers are often lower than traditional offers. It is up to the seller to decide whether the benefits of a cash offer outweigh the risks.
There are many legitimate companies that will purchase homes from cash and provide you with a great experience. At New Again Houses®, we buy houses in any condition and transform them into fully remodeled homes families can enjoy for years to come. We will never sell your contract or your information and would love the opportunity to invest into the community by making your older home new again. If you need to sell your distressed home or property, you can trust us to make you a fast and fair cash offer for your home.