Selling a house subject to a buyer securing lender approval, favors the buyer over the seller. Why’s that? In the first instance, the buyer can benefit from an appraisal contingency. This enables them to back out if an appraiser decides they offered to pay too much money, and they usually get their earnest money back too. A cash sale avoids all this. There are more advantages to selling your house for cash.
If the sale is subject to a mortgage, for example, the purchaser can simply walk away if they cannot obtain a loan. The seller is back where they started when this happens. This can spell disaster if they have foreclosure or bankruptcy procedures pending. When you sell for cash you have none of these hassles, and the deal might even complete within a week.
The Ultimate Horror Story Unfolds when a Buyer Dies Intestate
When a buyer dies before the sale completes, and without having a will, the entire system grinds to a halt. That’s because their estate has a right to take transfer but nobody yet knows the person entitled to do so. Intestate estates can take years to resolve as relatives squabble and lawyers rack up fees. A seller in financial difficulty could lose everything regretting, “Why, oh why did I not go for a quick cash deal.”
Selling Your House for Cash and The Time Value of Money
The time value of money states that $100 now is worth more than $100 in the future because we can invest it now and grow it in the interim. When we sell a house to a seller needing to borrow money, the value of our asset locks in while they complete the process. If the property market ticks up, it’s good for them because they could onward sell for a profit. However, if we want to purchase a replacement property, things just got harder.
Our Circumstances Can Change While We Wait
Benjamin Franklin said there are only two things certain in this life: death and taxes. All the rest is up in the air and we navigate as best we can. Let’s say we decide to sell our house to chase an exceptional business or investment opportunity. The seller of the opportunity gives us a month to raise the cash. Our property sale falls through the floor after 25 days because the buyer is unable to get the money together. Selling your house for cash considerably reduces this risk.
Selling Your House Without a Mortgage is Quick and Easy
Selling your house with a mortgage is a bit of a gamble for reasons we explained. Selling your house for cash is more of a dead cert because the period is shorter.
- You don’t have to chew your fingernails waiting for lender approval
- You don’t face the threat of an appraisal contingency biting you
- You could close the deal in a week and get cash right away
Selling your house for cash should be the preferred option when we need to quickly shake the value loose. It is also the ideal solution for a homeowner with a pressing need to fend off bankruptcy or foreclosure.
Looking for a cash buyer?