Selling a house is a simple process in terms of the basics. Getting to the point where you attract a buyer isn’t easy, but going through the motions is. For example, you work with the bank, wait for them to approve the sale, and hand over the keys. There is almost always a lender involved.
Sometimes, buyers flip the script and offer cash upfront. This is a seller’s dream because it reduces costs and speeds up the process. You could be moving to your new dream home or homestead sooner. However, there are some basics that homeowners need to be aware of before they accept a bag full of money.
Here are the fundamentals of dealing with cash buyers.
Do Your Homework
Yes, the advantages stand out quite clearly in the beginning. Who doesn’t want to cut out the middleman and save a significant sum of money? Still, the positives have a way of inhibiting your view as they are all you can see. Unfortunately, it’s hard to spot the warning signs which bubble under the service, such as the source. Cash is good, but you don’t want dirty money. Then, there are the companies which add on expenses after agreeing to a price. With an as is sale, there is no need to worry because the buyer agrees to buy it in any condition. Do your homework and make sure you can trust the individual or business before signing on the dotted line.
Gazundering
Although it sounds like a made-up word, it’s a bona fide trick of the trade. Knowing they have the leverage, cash buyers lower the offer at the very last minute – gazundering. They do this for one reason: to force you into accepting a lower offer. Now, you can do two things, accept or decline. Your response should depend on the scenario. If the new bid is an insult and you can get more money, say no. However, if it is about as much as you would get by involving a bank, you may want to consider it.
Eager to Sell Quickly
Even though accepting a cash offer might be a good thing, don’t let yourself be taken advantage of. It seems strange that gazundering is avoidable. After all, it makes sense for a buyer to try it to slash the sale amount. The thing is some buyers know it is not worth their energy based on the seller. Homeowners that jump at the first offer put on the table are desperate to get the property off of their hands. As a result, they are more likely to accept a lower offer too. Perfecting your “poker face” to make them sweat is an excellent defensive strategy. Even if you are eager to sell quickly, don’t let the buyer see it.
Lower Than Traditional Offers
The offer is low, but it isn’t unreasonable. What cash buyers do is to factor in multiple things before making an offer. The first are the fees a lender would add if you used their services. The second is stress. In some cases, the amount may be a couple of hundred dollars short of your valuation or of what others are willing to pay. However, the fact that cash is straightforward and hassle-free makes the offer appealing. That’s why cash bids are historically lower than traditional offers.
What you have to decide is whether the positives outweigh the negatives.