Find out the pros and cons to taking a cash offer vs. listing your home on the open market.
Hello, everyone. My name is Phil with Go Sold Group, and today I want to answer the question, what are the pros and cons of listing my home on the open market versus selling it to a cash investor? Stay tuned.
Let’s talk about the pros to a cash offer. The number one pro, it’s cash, so you don’t have to worry about a loan, nor do you have to worry about an appraisal. Another huge pro to a cash option is that they can typically close pretty quick. You’re thinking 10 to 14 days. Sometimes even sooner than that. Also, the nice part about the cash option is sometimes they take the home as is, and you don’t have to worry about showing the house.
Let’s talk about some of the cons that you should look for when you’re dealing with a cash offer. First off, as you know, since they are cash, we’ve seen over the last 15 years that you’re either selling it between 10 to 20% less. Another con to the cash offers that you want to look out for is that there’s also convenience fees for whoever’s buying it. If it’s a normal investor or a larger company that’s buying it for cash, make sure to check out their convenience fees, because those can run anywhere between six to 17% is what we’ve seen.
The last con that you want to look out for with cash investors or the larger companies that are buying the homes for cash is during the inspection period. A lot of times during the inspection period the cash investors or larger companies will ask for even more money. We’ve seen anywhere between $5,000 all the way up to 20,000, depending on what they find during the inspection. Unfortunately, the sellers have already started packing and they don’t know exactly what their options are, so they end up giving them more credit for those repairs. That’s just something to look out for in regards to the cons of the cash offer.
What are some of the pros to a regular listing and putting your house on the open market? One of the things to keep in mind is that the open market by far is the best place to obtain maximum dollar, because that’s where the largest audience of buyers are. Not only are there normal buyers that want the house, we also come across a lot of cash buyers once the house hits the open market. Then last but not least, as far as the largest pro for putting your property on the open market is going to be somebody’s actually representing your best interest. Now, not only are they representing your best interests through the time that you’re negotiating on price when an offer comes through, they’re also representing your best interest during the repair request list stage. During the home inspection, when the repair request list comes in, somebody is on your side negotiating on your behalf so you’re not giving out more equity than need be.
What’s the con of listing your property on a normal sale on the open market? Well, the con is you have to show the house. Now, one of the things that I always tell my clients over the last 15 years is I would weigh both options, but when it comes time to actually show the home versus the amount of equity you could have in your pocket at the end, a lot of times the equity outweighs the showing of the house. However, it is a con for some that the house has to be shown. I hope this video was helpful in regards to your decision-making of taking a cash option versus listing your home on the open market.