What Do I Do When I Receive a Cash Offer on My House?

home buying process

Selling a home fast can never be easy and resolved if the seller picks out the wrong audience to market it. If the intention involves time sensitivity, the only way to sell a house fast is through a cash offer. This is because, without a middle man or loan lender, sellers can close a deal as quickly as possible without the unnecessarily prolonged pre-approval process.

If events go as planned and the seller receives a cash offer, the next big step is “How do I deal with this offer?” When it seems too vague going after that question, let us narrow it down for you. Here’s what up next when receiving a cash offer on your house:

No Stress Sales Negotiation

First things first, remember that accepting cash offers is how the seller can quickly close on a house within a week or two. Contrary to mortgage offers, pre-closing usually requires appraisal and inspection (which, by the way, has fees too). 

These two factors make such a huge impact when it comes to the home buying process because they are usually the one that slows down the transaction. It mostly takes 30 to 45 days to get appraised by the lender which takes a toll not only on the buyer but heavily, on the seller. 

home buying process

Source: sold.com

Settle All the Credentials

A cash offer generally has a faster home buying process than mortgage offers. There are no loan application and underwriting needed because appraisal (pre-approval of loan by the mortgage lender) can be out of the process. 

With this in mind, the seller should be aware of the buyer’s reliability. This includes the settlement of financial statements to further back-up that the buyer is indeed capable of paying cash on the spot. Once this is settled, the process becomes easier to take, given that both sides are assured of what they can offer and at the same time, establishes rapport. 

Do Not Over or Under Price

A cash offer commonly saves up more money due to cut off appraisal and inspection fees. There are also no interest rates every month to deal with which makes it cheaper than a loan. 

However, despite its benefits, it is still best and advisable to negotiate with the price the buyer is comfortable with. By settling his financial capability, the seller can juggle around the price within the given range. This is to provide the proper value the house deserves and also to showcase the quick repairs and renovations the property already had (indicating that the house is worth an extra buck). 

The Sense of Security and Ownership 

Once the seller is satisfied with the buyer’s financial credibility, the next step is to arrange legal documentation regarding homeownership. This way, the seller is assuring the buyer that it is a done deal already – resulting in decreased financial back-outs. This is where the Title Policy and Insurance will take place. 

This also gives the buyer a sense of responsibility and looking forward to receiving the deed of the house. This process often gives the client the excitement and anticipation they have held on to prior to officially closing the deal. 

home buying process

Source: realtor.com

Sealing the Deal 

The closing process with a cash buyer is easier and direct to the point unlike offers with lenders. Accepting a cash offer is also quicker in closing deals since there is no appraisal from the bank. 

As an extension of security and ownership, this is where final settlements will be arranged. This involves the settlement statement, title, deed, payment transaction (either through cheque or online banking), and last but not least – receiving the keys to the now newly owned home. 

When receiving a cash offer, the seller should not be blinded easily by the amount the buyer is willing to give. Even if cash offers make the home buying process quicker, the transaction itself should never be hurried. It is still best to walk the client through a path that can be smoothly understood and agreed on. 

It is essential that the seller gradually explains documentation, property value inclusions, and the repair expenses to the client. This is to not just sustain rapport with the client but also prevent various demands in the future. The last thing a seller wants to have is an over repeating homeowner just because he did not get a thorough discussion. This leaves the seller free of any hassle since the buyer will most likely take upon the responsibility of becoming a homeowner. Before you sell your house, make sure everything is in order.