In today's real estate market, homes stay on the market for about 33 days on average before going under contract.
That's better than back in 2010, when homes were averaging 140 days to sell, but it's still not fast, and there's no
guarantee that your home will sell in 33 days. Location, season, and many other factors affect how quickly you can sell
a home.
If you need to sell your home quickly, those "We Buy Houses for Cash" advertisements may have caught your eye. Can you
really sell your home as-is in just a few days?
Who are they?
"We buy houses for cash" buyers are not your typical buyer looking for a home to live in or rent out. They are real estate
investors looking to make a quick profit.
As such, they are looking to purchase a home for the lowest price possible, fix it up as needed, and sell it on the open
market a short time later. These types of investors can make a huge profit on a home in just a few months.
Who do they target?
These cash buyers are looking for motivated or desperate sellers. For example, let's say you listed your home, but the
listing eventually expired without resulting in a sale. At this point, you would probably be contacted by a cash buyer.
They're hoping you'll be discouraged by your failure on the open market and will be willing to sell your house for cash
at a reduced price.
In the same vein, cash buyers go after people in situations that require a fast sale such as divorce, bankruptcy,
foreclosure, and probate sales.
Are there benefits?
For many people in situations such as these, selling a home quickly might be the number one priority, despite the potential
to maximize return. And selling to a cash buyer certainly is fast. The typical financed purchase takes about 30 days to close.
Appraisals, contracts, and other procedures take time, and they must be done before funds are released.
Cash buyers don't have to deal with that. They can close quickly in about 7 business days.
What's the catch?
Say goodbye to any profits and probably the equity that you've built up in your home.
The offer that cash buyers make is often suspiciously just enough to pay off your mortgage. You will likely
only receive 50-80% of market value. Although 80% of market value might seem like it's worth it to avoid the hassle
of going the conventional route, but the average is more like 65% of market value.
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