If you’re thinking of selling your house to a cash buyer, you probably already know you’re looking at a much smoother process than if you sold to a financed buyer. When you sell your home for cash, you bypass several tedious steps that slow the process or can even lead to cancellation of the sale.
That said, a cash sale still comes with its own set of procedures. So, exactly how complicated is the process for selling your house for cash?
Well, that depends quite a bit on who your cash buyer is.
Let’s say, for example, you’ve made a traditional all-cash deal with an individual who wants to make your house their new home. They want to make sure the property is in prime condition. You want to make sure this individual is good for the money they’ve promised you. Both you and the buyer will want to take a few extra steps to ensure the deal is a smart one for you both.
If, on the other hand, you sell to an instant cash buyer who sees your property as an investment, you are looking at fewer steps and faster closing. In fact, this option is so simple, you can frequently name your closing date to accommodate your moving schedule.
So, that’s the snapshot. Let’s take a look at exactly what each of these processes entails.
Process for a Traditional All-Cash Home Sale
One major benefit of an all-cash offer is that you don’t have to involve a bank in finalizing the deal. There is no third party that could destroy the deal weeks into the process by deciding to deny financing.
Even so, if you’re selling to a buyer who wants the house for themselves, there are a few smaller hurdles to clear . . . and a handful of opportunities for the deal to fall through.
Here’s what the process looks like.
Step 1: Accept the Offer and Sign the Contract
If you’re happy with your cash buyer’s offer, you complete what’s called a “Purchase and Sale Agreement.” Once you sign that agreement, you are officially under contract.
As a side note, you’ll want to notice if your agreement includes an inspection contingency. This is an addendum stating that buyer can renegotiate the sales price or insist on repairs if any issues are discovered during inspection. It’s not at all unreasonable for the buyer to include an inspection contingency, but it should put you on alert for potential complications later in the process.
Step 2: Proof of Funds
This step is important for your protection when working with an individual who plans to purchase your home using their own cash. There are a couple steps you want to take to ensure the funding is truly there. First, you request 1% or 2% of the sales price up front. This is called “earnest money.”
Then, you need to verify that they’re good for the rest. It helps to have a real estate agent to help with this process so you don’t miss any important considerations.
Step 3: Hire a Title Company
A title company enters the sales process to make sure everything is on the up-and-up. They double check property lines, issue title insurance, and oversee the official change in property ownership.
The title company also investigates for any property liens. In the case of unpaid debts, a property lien may have been placed on your home. An uncleared lien will halt a home sale. (Don’t worry about any unpleasant surprises. If there’s a lien on your home, you most likely know about it.)
Step 4: Hire an Escrow Company
Your escrow company may or may not be the same as your title company. Either way, you need someone to oversee closing documents, legal paperwork, and the transfer of funds. This is what an escrow company does.
Step 5: Undergo Inspection
This is where things can get sticky for home sellers who need to sell fast and at minimal expense. Remember that inspection contingency in your Purchase and Sale Agreement?
This is the step in which your cash buyer orders a home inspection. If any issues are discovered, your buyer will likely request repairs or choose to renegotiate the price. Either way, it means less money in your pocket.
Step 6: Sign Closing Documents
Congratulations! You made it through steps 1-5, and the end is finally in sight. All you have left to do is sign the following documents:
- Final Closing Instructions
- Statement of Closing Costs
- Statement of Information
- HUD-1 Settlement Statement
- Loan Payoff Statement
- Mechanics Lien
- Bill of Sale
- Certificate of Title
- Title Deed
And there it is. You’re done. You’ve sold your house, and you’re ready to move on. It took a little effort, but it was still a much shorter process than working with a financed buyer.
However, if you’re looking for an even simpler way . . .
Process for Selling Your Home to an Instant Cash Buyer
An instant cash buyer like Mac Properties is often a buyer who values your home as an investment. This means they purchase your property as-is, with no additional inspections or repairs necessary. You don’t even have to do any remodeling or staging to make your house more appealing.
In addition to saving on home improvement costs, working with an instant cash buyer will typically spare you the expense of hiring third-party agents and companies to guide you through closing. Home buying enterprises know the process backwards, forwards, and inside out, and they have a streamlined process for getting through the paperwork quickly, professionally, and at no extra cost to you.
Here’s what you can expect when you work with an instant cash buyer.
Step 1: Schedule a Visit
Contact the buyer and express your interest in receiving a cash offer. The cash buyer may have a few questions about the property, but in most cases, they will schedule a visit right away. At the agreed-upon time, the buyer arrives at your home and inspects the property.
Step 2: Get an Offer
An instant cash buyer will get back to you quickly with an offer . . . some in as little as 24 hours.
Once you accept the offer, the buyer takes on the responsibility of initiating the closing process. There is nothing left for you to do but sign papers. Even better, there is no risk of the deal falling through. When you accept an offer, you can count on closing.
Step 3: Get Paid For Your Home
After agreeing to the buyer’s offer, you can get your cash in as little as 5 days. Or, you can extend the process if you need a little more time in the house before closing.
You see, one great benefit to working with an instant cash buyer is that many investors will offer you some control over your closing date. That way, you have freedom and flexibility as you plan the next phase of your life, whether you’re rushing to move on or would like a few more weeks to plan with the peace of mind that comes of having sold your home.
Selling your house for cash can potentially be more complicated than it seems, depending on the buyer you’re working with. If you’d like some assistance with a smooth selling process, we’re happy to help. Please feel free to reach out any time with questions or to request a quick and easy cash offer.