A growing share of the real estate market is made up of Cash home buyers investors who pay for homes without using mortgage financing. These buyers often buy properties in need of work and then either repair them or sell them for a profit. They can also enter into “contract assignments” where they take over a property’s contract from another investor for a fee. Cash home buyers can have a huge impact on the housing market, speeding up the sale process and making it easier for sellers to negotiate.
Cash home buyers are usually older, repeat homebuyers with significant equity built up in their existing homes. A recent study by NAR found that half of older Baby Boomers and Silent Generation buyers paid for their latest home purchases with all-cash. Younger homebuyers typically have smaller down payments and may use mortgage financing to buy their first homes.
Selling a home to a cash buyer typically takes less time than a conventional transaction, since the purchase does not depend on mortgage financing. It can close in as little as a few weeks, or even a few days, if the seller and buyer are on good terms and there are no issues with the title. However, there are other factors that can delay the closing process, including negotiating repairs or other post-closing contingencies.
All-cash purchases can also affect inventory, reducing the number of available properties for homebuyers who require mortgage financing. This can drive up home prices, especially in hot markets where competition for properties is high.
While there are a number of advantages to selling to a cash buyer, it is important for homeowners to carefully weigh the pros and cons of this type of sale before proceeding. The key is to work with a reputable homebuyer who will provide you with an upfront, transparent process and offer fair market value for your home.
In most cases, a cash home buyer will perform an inspection or an onsite evaluation, but this is not always the case and can depend on the individual or company you are working with. A home inspector can help you identify any problems that could be costly to fix and allow you to renegotiate your price with the buyer or request a lower offer.
If you are considering a sale to an all-cash buyer, be sure to ask the buyer’s agent for proof of funds. You can also get a preapproval letter from your lender, which will make you more competitive and show that you are a capable homebuyer.
If you are receiving unwanted solicitations from investors who want to buy your home, contact your local housing authority or the Federal Trade Commission’s Do Not Call registry. In some areas, investors can be fined for commercial harassment if they continue to contact homeowners after they have been told to stop. If you are still being pestered, file a complaint with your state or city attorney’s office.