Should you sell to a cash home buyer? What are the advantages? Where can you find them?
If you are considering selling your house, a cash home buyer might sound like an appealing option. The big questions most property owners have are how much they can really expect to get from a cash buyer versus others? If the math might work out in your favor, what are the pros and cons of the different ways to connect with them?
What is a Cash Home Buyer?
There are three main types of house buyers out there in the market today:
- Buyers needing a bank mortgage loan for financing
- Buyers seeking seller financing opportunities
- Buyers who can and are willing to pay all cash for properties
Despite some of the hype and marketing out there, cash paying buyers who would actually want to live in your property are very few. Consider that less than 90% of the population has $5,000 in savings.
That means you’d be hoping to land the top 10% of affluent people to purchase your home. In most cases these wealthy buyers also prefer to finance their purchases because they are looking at more expensive homes, are seeking tax advantages and asset protection benefits of having a loan on their home.
What is more common to find is cash buyers who are real estate investors. They are willing to pay all cash for a swift closing and to avoid finance costs. This group is typically looking for properties which they can fix up and rent out to tenants, or can renovate and update to resell later on.
Those that really have the money typically organize themselves as businesses. They may even be funds or partnerships which have the combined capital of a number of private investors. So, for the purpose of this report we are focusing on finding a cash home buyer who is a company that buys houses.
How to Find a Cash Home Buyer for Your Property
There are a variety of ways to search for cash buyers for your house. Let’s take a look at some of the pros and cons of each.
You can always just hit up Google, Siri, or Alexa to search for cash home buyers.
You can simply try to Google “we buy houses companies in (your city.)” or “sell my house to an investor in (my city).” It’s fast and easy. It can save a lot of time and money versus trying to do a bunch of DIY marketing to attract buyers to you.
Recently there has been a big explosion of people trying to get into this space to buy properties. Some are good. Though there can also be a lot of work to do to separate the newbies and opportunists from the serious and those that really have the cash to buy.
Craigslist has taken over as the most popular classified ad platform. You can post your property for sale there too.
Listing your property on Craigslist.com is pretty fast and easy. It is even free in some cities. This allows buyers to find you, instead of you having to look for them.
It can be harder to be found on Craigslist than you think. Many scammers and Realtors use it, and can bury your house listing under hundreds of others within minutes or hours. Even if that doesn’t happen, you might find you just get bombarded by low ball offers from those looking for absolute steals, or have to try and filter out all the scammers and criminals. Or you may just get dozens of calls from agents who want to list your house for sale, not buy it.
Ask a Real Estate Agent
You don’t necessarily have to list your home with a Realtor to get them to connect you with a cash buyer. They may know someone with the money who has already been looking for a property like yours.
A great agent may have an established network of ready buyers who can pay cash and close fast. You can still expect to have to pay their commission, but this can speed things up, without being locked into a contract.
Unfortunately, many agents are not as successful as they make themselves out to be. They may not have those connections. Or some will say they do, and try to get you to sign their contract and lock you in, only to leave you stuck in a long listing arrangement. Some will just harass you and try to scare you into listing with them, instead of listening to you and your concerns, or what is in your best interests.
How Much Will a Cash Buyer Pay for My House?
How much a buy of any type will offer and pay for your house depends on a variety of factors.
Condition of the Home
Many regular home buyers who are looking for somewhere to live, or who are new to investing in real estate may make a lot of demands when it comes to condition and repairs. Or they may just be scared off, because they aren’t sure how big the job is, how much it will cost, or they don’t have the cash to do it.
If they do make an offer they are likely to include clauses which allow them to back out after inspections, or require you to pay for, and possible make the repairs before the closing. That can be risky as a seller as they may not close, even if you have the money to do it.
The best cash buyers will be willing to purchase you home “as-is.” It doesn’t matter if your home could just use a few touch ups, needs updating, or has serious water, wind, or fire damage… they will buy it. However, they will have to price these factors into their offers, as these are items they will have to pay to fix out of their own pocket after they buy it.
How appealing is the neighborhood right now? Are there a number of other properties up for sale? Have they been taking a while to sell? How are they priced compared to yours? Do neighboring homes and neighbors look appealing and friendly, or are they detracting from your home’s value and rental potential?
Macro Market Factors
The economy and housing market in general definitely play a role in how much people should be willing to pay for your home. Have interest rates gone up, or are expected to go up? This could make the home far more expensive in real terms, even if the price isn’t any higher than a few years ago. It could make it a lot harder to rent or sell in the future. What direction is the market headed in? If it has been going up, it could be about to head down soon. A buyer may have to factor in that they’ll be taking a 10% to 20% drop in the value in the months ahead. The same goes for rents.
Net Proceeds to You
If you list with an agent, they may promise you a higher price that they can never get you. You’d also have to pay at least one or two agents a commission. That can mean a 6% loss right off the top, and you may have to pay taxes on that money too.
You won’t have to pay those commissions if you go direct with a cash buyer. This also means being able to sell a lot faster, and avoiding more holding costs, and the risks that can come with waiting. Expect there to be some balance in this priced into the offer.
Ultimately the best way to find out how much a cash buyer will pay for your home is to reach out and contact one that is local. It doesn’t cost you anything to ask, and you might be really pleased with the number.
The Benefits of Selling a House to an All Cash Buyer
Aside from just getting all cash right away, there are an array of important and very valuable benefits of selling directly to an all cash buyer.
A traditional real estate closing through a real estate agent, with a financed buyer can take a long time. It can sometimes take months to coordinate appraisals, title, insurances, and loans. That’s after you sign a contract. A cash buyer can typically close in a matter of days. Though the best will also work with you on a closing date and time that works for you, if you need more time to move.
Going to contract with a buyer relying on financing can be very risky. Especially now. There can be a lot of extra demands on you as a seller. Lenders can be very fickle and you never know when the deal will all fall apart. The borrower could lose a job, change their mind, the appraisal may come in short, lenders may demand repairs to be made in advance, or they may just run out of money before the transaction is funded. Unfortunately, this often all happens at the very last minute. Then you may be left starting all over from scratch.
Or if your home is vandalized, a storm hits you, a neighbor sells cheap, or the market changes during the long process, the deal can be cancelled, and you’ll have to try to sell it again, for less.
All of the above, including the marketing time of taking the DIY for sale by owner approach and doing your own marketing, or waiting on a real estate agent can mean months of stress, uncertainty, and sleepless nights. Selling should be a positive thing, not a stressful one. You don’t need to put your health and sanity, or relationships at risk, like that if you choose a cash buyer.
Higher Net Proceeds
While a cash buyer may offer a little less than a Realtor is willing to list at, you can still end up pocketing more money, and that’s what’s really important. This is due to fewer costs, as well as avoiding the risks of waiting, and the expense of holding costs. Every day you wait for a closing means property taxes, utilities, and often interest, association fees, and even legal fees too. That all comes out of your net cash. Close faster with a cash buyer and you’ll keep more of the sales price.
There are actually many tangible advantages of selling direct to a cash buyer. There are a number of ways to find or attract them too. Each has its pros and cons. Equipped with this information you should be able to make an educated decision on what’s best for you.
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True, foreclosures are depressing. But it doesn’t need to be an inevitable consequence of failing to pay your mortgage, especially when you take quick remedial action. There are several assistance programs managed by the government to help homeowners. Here are three things you can do to avoid foreclosure:
- Address the issue:
Do not ignore a foreclosure notice. If you anticipate delays in mortgage payments, remember to be proactive about keeping the stakeholders informed. Explain your situation and look for possible solutions. Give them as much financial information as possible. You could either speak to the bank or contact a HUD-approved housing counseling agency. They can help you with information about government programs and other services. You may either apply to modify or refinance your loan for lower payments.
- Deed in Lieu:
Homeowners facing foreclosure can sign a deed transferring ownership to the bank, albeit voluntarily. This is in effect, the same as a foreclosure, but less damaging to your credit score. Lenders allow a deed in lieu of foreclosure only in rare circumstances. To qualify for this, the homeowner shouldn’t be eligible for any other option, and his attempts at selling the house have come to a standstill. You could speak to housing counseling agency to determine if you qualify.
- Short Sale:
The best option is to sell your house even before the bank initiates foreclosure proceedings. Cash home-buyers help people looking to sell their house fast and for cash.
For example, at Area Code Home Buyers, we buy houses for cash and close as quickly as you want.
We’ll buy the house as is. You do not have to spend on repairs or cleaning. We’ll close when you’re ready and settle within seven days.
How To Manage Common Home Repairs
Whether you live in a sprawling mansion or a tiny studio apartment, there are some repairs that you cannot avoid. The problem, however, lies in ascertaining if it makes sense to fix them or sell the house As Is. Here is a list of common repairs and what you should do:
Houses with multiple problems
If the house is fairly old with multiple problems, it’s best to sell the house AS IS to a cash home buyer. For example, you may have spent hundreds of dollars on a new roof, but repairing internal problems like mold, damaged drywall, insulation caused by the leaking roof can be very expensive. Even if you go ahead with the repairs, you are still required to list them on the seller’s disclosure notice or face legal consequences.
Prospective home buyers wouldn’t be enthusiastic about paying top price for homes that have undergone major repairs, especially when those are related to internal leakage or roof repairs. Rather than haggle with them, it makes sense to avoid spending on repairs and sell the property to a real estate investor.
Homes with important, but not expensive repairs
Sometimes, you may not need to fix the entire house. But on most occasions, the repairs may not be extensive or expensive. For example, re-piping, installing a new HVAC system, and electrical work are important, but not as expensive as fixing a leaking ceiling. Some flaws are cosmetic and not a cause for concern. If you are planning to sell the house, and fixing them could increase the value of your home, you should go ahead and fix them.
If you cannot afford the repairs, or you do not want to be bothered about the extra work and time, it’s best to sell the house. At Area Code Home Buyers, we buy houses for cash – any condition and location. We’ll close when you’re ready and buy the place as is!
There are few things as complicated as selling a house. It’s not just about selling the house for the right price; from pre and after-sale expenses to finding the right buyer, there are a hundred things that homeowners have to worry about. Here are three tips to ensure a stress-free sale:
Do your homework:
Without a plan to sell your house, you may end up choosing the wrong real estate agent, or worse, sell the house for the wrong price. How much did houses sell for in your neighbourhood? What’s the lowest selling price you are willing to accept? Go through home-related documents and the mortgage to make sure you have covered everything. How much can you afford to pay for repairs? Preparing for these things in advance helps you overcome potential problems. Why do you want to sell the house? Are you planning to downsize? Are you planning to relocate to another city? Have you been issued a foreclosure notice and would like to sell it as quickly as possible?
Brokers may give little notice before asking if they can bring prospective buyers to show your house. This can be stressful because you’ll have to keep the house orderly and show ready at all times. Before you decide to sell the house, organize your belongings by de-cluttering things and arranging for a deep-clean.
Contact us if you’d like a truly stress-free sale. We are real estate investors; we buy houses for cash. You don’t have to pay us a commission or worry about carry out repairs. We buy houses As Is, you do not have to spend money prepping the house for sale or worry about after-sale repairs. Unlike a conventional sale, we can close and settle in less than 14 days.
Looking to sell your house fast? Contact us!
Selling a house can be stressful! Apparently, it’s not just us – an independent report by estatesdirect.com has found that more than a quarter of the people they surveyed have had a bad experience trying to sell their house!
Some people thought the realtors to be dragging their feet, and some were overwhelmed by the fact that the house had to be kept spotlessly clean at all times during the selling process.
The situation is especially difficult during a hurried sale. You could be facing a foreclosure or looking to move to another city and cannot afford to waste time or money on repairs and renovations. This is where we come in. If you’re wondering, how to sell your house fast, here’s why we think you should call us:
We can close in less than two weeks:
We’re direct home buyers, you do not have to deal with real estate agents or fret about listing your house on the MLS. No need to post pictures or videos of the house. You can call us over the phone or fill in the online contact form – we’ll come over to your place for an initial meeting to know more about your situation. If you agree to our offer price, we’ll close on a date you choose!
We pay cash:
We buy houses for cash. We’re home investors, we buy rundown properties, make the necessary repairs, and then resell or rent them. Unlike others, our team of homebuyers do not have to worry about the red tape surrounding loan approvals, and do not make you wait until the escrow closes.
We promise a stress-free sale:
You do not have to worry about cleaning the house or getting rid of the junk. We’ll do it for you – we buy houses As Is. You can leave the house with only the things you like and leave the rest. Don’t worry about after-sale cleaning as well.
Planning to sell your house fast? Call us 866-263-9960 or fill out the form below!
Is it possible to sell a house in foreclosure? If so, what options are there? How does it work? What are the best ways to do it? We cover every question you may have related to selling a home while in foreclosure.
Being in foreclosure can be an incredibly stressful situation. It happens. It has happened to millions of American households. What is more important, is what you do once you find yourself in foreclosure. There is hope. Yet, there are also many dangerous pitfalls. So, if you are in foreclosure, or fear you may end up there, what can you do? What should you do?
Foreclosure is a legal process by which a creditor attempts to collect on a debt, or recover what they can from a pending loss.
The most common form of foreclosure we hear about is house foreclosures. Specifically, when a borrower fails to make their loan payments. These are what reportedly made up the bulk of the foreclosure crisis of 2008. Millions of homes were lost in foreclosure during this period. Though experts point out there is always some level of default rate.
While the most well-known form of foreclosure is failing to make mortgage payments on time. There are actually a wide variety of ways that homeowners can find themselves in foreclosure, such as delinquent property taxes, condemned properties, condemned properties, Liens, and fraud. For this article we’ll focus on the most common foreclosure type: mortgage defaults.
What Happens if My House is in Foreclosure?
Foreclosure can be scary. What’s worse is not understanding the process. Or even ignoring the warnings and help to solve it early.
Foreclosures work differently in different states. There can also be slight variances depending on the number of foreclosures happening, why you are being foreclosed on, regulatory changes, and the position that lenders are in.
In most cases you will receive several warnings. If you are late on paying your mortgage payment, you can bet your lender and loan servicer will make multiple attempts to reach out and let you know. They’ll send you mail, email, and call you on the phone. They may even stalk you by text message, voicemail, send out inspectors, and hunt you on Facebook.
If you have a residential home mortgage on a house you live in, you will have 30 days from your payment due date before things really begin to snowball. After that, your credit will start to be impacted, and your options will begin shrinking. After this you may get letters from attorneys representing the lender. With each letter you will have been accruing back interest, late fees, and attorney’s fees on top of that. You will typically have 90 days before a Notice of Default (NOD) is filed with the courts, and the foreclosure process really kicks in.
What happens next can generally be broken down by the state in which you live. There are ‘judicial states’ and ‘non-judicial’ states.
Judicial vs. Non-Judicial Foreclosures
According to the Mortgage Bankers Association judicial foreclosure states include:
- New Jersey
- New Mexico
- New York
- North Dakota
- South Carolina
The foreclosure process in judicial states
The judicial foreclosure process is typically notoriously longer than in non-judicial states. The exact time it takes can vary widely, depending on how desirable the property is for the lender to take, the financial condition of the lender, current regulations, and court backlogs.
Once a borrower is late on their mortgage payment, they will begin getting notices from loan servicers. Once the loan becomes 30 days late, it will be reported to the credit bureaus. Expect attorney letters to start coming in. Fees and back interest begin to mount up.
This begins to snowball through the 90-day market. Since the crisis of 2008, and the new pressure it put on lenders, the actual court case to pursue foreclosure may not be filed until this 90 -day point. Sometimes it may be longer. Yet, it is a huge mistake to try and guess. Expect it to happen swiftly.
The court will approve the filing, and a date will be set for the foreclosure sale. The property goes to auction. If no one bids higher than the lender, they will take possession of it, and be issued the title.
If you haven’t already moved out, the sheriff will have the job of evicting you, and removing your belongings from the property. This is not a pleasant experience.
These are found in:
- New Hampshire
- North Carolina
- Rhode Island
- South Dakota
- West Virginia
The non-judicial foreclosure process
Non-judicial foreclosures are much faster. They don’t have to wait to go through the court process. Once borrowers receive a notice of default (NOD), and the notice of trustee sale, the property goes right to auction. If you can’t catch up before the auction, the bank may get possession of the property, or another third party may bid and win it, and the deed.
Deficiency Judgments & Tax Consequences
What many homeowners don’t realize is that in some states a deficiency judgement is allowed. When a property is sold at auction, but the price doesn’t cover all the interest, balance, fees, and costs owed, then the lender can win a judgement for the outstanding balance. That means you can lose your home, and still owe the money for the mortgage, etc.
Depending on how aggressive they are allowed to pursue you, they may be able to seize personal property or garnish your wages to collect. If they forgive the outstanding balance, then the IRS can consider this extra income. This can trigger more taxes or even a higher income tax rate. The IRS can then garnish wages, put a tax lien on you, block your passport, and seize cars and other belongings.
These are some of the things which make it so vital to get help and find a solution when in foreclosure. Foreclosure in itself is not the worst thing that can happen, it is all the things that comes along with it.
How Does a Foreclosure Affect my Credit?
Sadly, many homeowners have let themselves get down when their credit starts to take hits in the process. Late mortgage payments can be very damaging to credit and credit scores. Too many people don’t reach out for the help they need. A few 30 day late marks, or even a 90 day late mark aren’t great, but they will fall off of your credit report in a couple years and will no longer be a factor.
Having a foreclosure on your credit is a lot different. It will be on there for the best part of a decade. It can take years to even get a shot at new credit, or prepaid credit cards to rebuild credit. That means no emergency credit for medical emergencies, home appliances, cars. It can also be a factor in trying to rent an apartment, insurance, and even trying to get a job or promotion.
What Are My Options When in Foreclosure?
Reinstate Your Loan
If you can come up with the money fast enough, and can cover all the extra fees, then you can pay it up, and buy your way out of foreclosure.
You may also try to work with your lender or loan servicer. It certain hardship scenarios they may grant a temporary forbearance, allowing you to skip a few payments. In the midst of the crisis, some began offering loan modifications or catch up plans. Today lenders are far less likely to grant these, especially on new foreclosures and delinquencies.
Lose the Home
This really shouldn’t be an option, but it happens. Some are paralyzed by indecision, or drag their feet on getting help. Then their homes to auction and they are evicted. This doesn’t have to happen! Get help before it’s too late!
Bankruptcy is often posed as an option for stalling foreclosure. It can work, in some cases. However, it isn’t free, and you’ll need to be up to date on your income taxes. Unfortunately, many aren’t aware how heavy the costs of bankruptcy can really be. It’s just like going through a foreclosure as far as credit is concerned, and probably worse.
Sell Your Home
If you can’t catch up, and your lender isn’t working fast enough to help, then the best option is to sell the house. Many would prefer not to, but it is typically the most attractive scenario. You can get out from under the burden, get a fresh start with a clean slate, dodge all the negatives, and enjoy more hope of a better future.
How to Sell a House in Foreclosure
You can sell a house in foreclosure.
There are a couple of options, or frequently tried methods, including:
- Listing with a real estate agent
- Marketing it yourself as a for as a For Sale By Owner (FSBO)
- Selling it direct to a company that buys houses (investor)
In the unique situation of being in foreclosure the dynamics of the situation are quite different to a regular home sale. That can make the FSBO and Realtor listing route more complicated and challenging. Realtors can be helpful in a normal home sale situation. Unfortunately, in a foreclosure scenario, their high commissions, 30-day time frame for most buyer loans, and being locked into a long-term listing agreement can actually make it harder to sell.
If you try to just market it yourself, it will take marketing money, running ads, dealing with showings, and making repairs. All with just the hope that it will pay off in time. Most can’t afford that. This also doesn’t take into account the complexities of trying to work with your lender to facilitate the sale during the foreclosure process.
What are the Steps in Selling a House in Foreclosure?
- Find out how much you own the bank
- Get your bank notices and statements together
- Contact a local cash buyer
- Receive a free, no obligation offer on your home
- Accept the offer, and sign the sales contract
- Select your moving date
- Get help moving
What to Look for in a Buyer
If you are in foreclosure, or think you may soon fall into foreclosure, you cannot afford to gamble on a buyer who needs conventional mortgage financing which make not come through.
- A reputable buyer
- Someone who is local and understands your local market
- A buyer who is happy to answer all of your questions and explain the process
- Experience in buying homes in foreclosure
- An as-is offer, with no requirements to make repairs
- Someone who treats you with respect throughout the process
The Advantages of Selling Direct to an Investor
Selling a house in foreclosure direct to an investor has many benefits.
This can include:
- No waiting time
- Can close in 1-2 weeks
- No need to make repairs
- Cash buyers won’t be held up by financing
- An experienced partner who knows how to sail through the process with the bank
There’s no just waiting and hoping, or having to gamble the last of your savings or credit on a buyer eventually coming through, or investing in fixing up your place. Qualified cash paying investors can close very quickly, will typically buy your home just as-is, and can work with your bank to make the sale happen. It’s the easiest, fastest, and surest way to avoid foreclosure, get cash, and get a fresh start.
In fact, selling to an investor is quite easy. Read more about how to sell a house fast in just 5 easy steps.
Foreclosure is never fun. It can be a very scary and stressful time. Unfortunately, it can, and invariably gets worse, the longer owners take to take action and secure a buyer for their properties. Every day means less time, more penalties, fewer options, and less cash back in your pocket. Exactly how long it will take for the bank to sell your home and evict you can vary widely.
In the pit of the crisis it could take more than a year. Today it can be a matter of a couple of months. There is no time to waste. Fortunately, there are cash buyers who can help.
If you are in foreclosure, are about to fall behind on payments, or are just struggling with other bills related to your home, contact us today. We have a nationwide directory of cash buyers and investors. We can put you directly in touch with those who can be of the best assistance to you, and will offer you the most money for your home, just as it is.
There is a brighter future just over the horizon. Just one call could make all the difference in being able to avoid foreclosure, and quickly bounce forward to better things. You deserve that chance. Help is waiting, if you take the easy step of reaching out, and taking advantage of it. Don’t become another victim of the system.
We have local home buyers all over the country who are ready to help with. Just search here for your buyer or fill out the contact form below and we’ll connect you.
Frequently Asked Questions
Q. Can I sell a house in foreclosure?
A. Yes. If you act quickly, and find a qualified buyer you can still sell.
Q. How long does it take to sell a house in foreclosure?
A. Selling to a buyer can take as little as a few days to two weeks.
Q. Can I still sell my house if it has no equity?
A. Yes. Even if you are upside down, underwater, and owe more on your mortgage than the home is worth, you can sell.
Q. Can you do a short sale while in foreclosure?
A. Regulations have dictated that lenders choose foreclosure or a short sale or loan modification. However, if you are already in foreclosure, a new buyer may be able to work directly with you bank and achieve a short sale.
Q. What if I already have an auction date?
A. Even if your property is already scheduled to go to foreclosure auction, you can sell, but time is of the essence. You must get help immediately.
Q. What is my home needs repairs?
A. With the right buyer, you will not need to make repairs or even clean your home. Some will buy it just as is.
Q. What if I have liens against my home?
A. Experienced buyer can help buy your home, even if you have HOA liens, property tax liens, and mechanics’ liens against your home or code violations.
Q. What can I do to ensure a faster sale?
A. The more information you can provide your seller and the closing agent, the faster they can close. Being able to provide your last mortgage statement, prior title policy, survey, and an old appraisal may all help.