Phoenix, Arizona, cost of living is high, which is why selling a house in Phoenix needs to be quick. When you are selling your house in Arizona, one of the most common ways to speed up the process is finding a cash buyer. Cash buyers can buy homes and properties quickly, while other buyers may have to secure financing before offering and revealing their true intent.
Cash buyers have many benefits for real estate transactions, including speed, discretion, no appraisals or credit checks required, and fewer contingencies that could cause delays or problems.
1. Speed
As Americans continue to recover from the COVID pandemic, many people who lost their jobs found themselves underwater on their mortgages, unable to sell or move because they owed more than what their property was worth. If you’re trying to free up some liquid capital so that you can relocate for a new job, a cash buyer can close quickly and allow you to move fast without the hassle of dealing with a lender. A fast home offer in Phoenix, Arizona, will mean you’ll ease your cost of living in Phoenix, significantly if it assists you in moving to the suburbs.
2. Discretion
When selling a house in Phoenix, you need to consider who will buy my house now in Phoenix? Do they have good or bad credit? Are they stable financially? Do they have a history in the community that leads you to believe they will care for your home as if it were their own? Will they make an EZ max offer? These are all questions that lending institutions would typically ask before approving a loan for someone. There are no stipulations or limitations on how the purchaser will use the home with a cash buyer, which means there are fewer reasons not to sell to them. A cash buyer looking for investment properties isn’t want to live in the homes they’re buying.
3. Fewer contingencies mean fewer delays in closing
Even with good credit and excellent payment history, most lenders will require that you have a home owner’s insurance before approving a loan. Therefore, this is just one example of how someone could get stuck waiting for financing to go through before a sale can get completed. Consider what happens if the appraisal comes back lower than expected or if any repairs are required? What happens if the buyer wants to inspect your home, request repairs, or cancel the contract entirely? The chances are pretty high that some part of this process will delay closing, which means you won’t be able to move right away.
4. Cash buyers don’t need appraisals or checks
Appraising your property can be a lengthy process that could take 30 or more days, depending on how much work needs to get done. The appraisal gets completed by a third party who will determine the value of your home gets typically paid by the lender who is providing you for financing. In some cases, the buyer may need to order their appraisal if they feel like your asking price is out of line with market value.
In many cases, cash buyers can make an offer without having appraisals ordered because they know what they’re willing to pay for it and won’t ask you to decrease your price to get them financed so that they can buy it quickly. Therefore This saves everyone time and money, especially if you have another home you’re trying to sell. Also, there are many scammers out there, and you need to stay alert for webuyhouses scams.
Benefits to the Cash Buyers
Having the option to use all available funds on closing day is one of many reasons why cash buyers can be an attractive option for home sellers. Those who don’t need financing, which means they’re not a risk to the bank, will generally get better terms and pricing from their home purchase. When interest rates are low, getting a tremendous rate as a cash buyer becomes even more attractive.
You don’t need to find financing before making your offer, which is another reason why it can be an attractive option for homebuyers in the present market. The process of qualifying for a loan takes some time and money, and unless you’re buying in an area with very competitive prices, you may not get approved at all.
For many sellers, getting total value on closing day when there are no appraisals or other hassles involved is definitely worth giving up that extra 1% of the interest they could have earned by using financing. Of course, this isn’t as significant a factor for those who prefer to use the funding, but those who don’t have perfect credit or who need to wait on a loan approval will want to give some serious consideration to using cash.
As long as the buyer can get his own lender’s appraisal at his expense and are willing to pay all closing costs not covered by seller concessions, they can offer any price they can afford, and it will be up to the seller whether he wants that price or not. Hence This is especially attractive when there are multiple offers on the table; if you’re bidding against investors, it may be harder for them to purchase without financing in place. The more generous seller concessions you can offer, the more likely you’ll be able to win your dream home over an investor when there’s more than one buyer involved.
When you have the option to use all available funds on closing day, you can offer any price you like without having to worry about appraised value and your ability (or inability) to borrow that amount for a loan. Therefore, this allows for more flexibility in negotiations; if multiple buyers offer cash, these additional terms will come into play.
Cash buyers need not win every bid, but when competing against others who don’t have access to all of their funds on the closing day, things may be closer than if they were just between two ‘cash only’ offers. Keep this in mind when bidding on a property; it’s okay if/when someone else is willing to give seller concessions; as long as you’re ready to pay all closing costs, they’ll likely not be as big an issue.
Even when you don’t win your dream home because another offer is higher, the seller still has to make any promises. If the winning bid included a leaseback, that’s one less headache you may have had to deal with and probably one more reason why that other buyer offered more than you.
When you close with total price, there are no appraisals or financing contingencies involved. Therefore This means there are no risks of ‘losing’ your earnest money deposit if things don’t work out on appraisal, and there are also none of the hassles of dealing with trying to get a loan in a timely fashion.
In addition to all of these great reasons, some great tax benefits come from using cash for your purchase, primarily if you use it as your primary residence or as an investment property. You won’t have deductible interest on traditional financing, but you’ll be able to start deducting interest and taxes immediately with a cash purchase. If you’re buying an investment property, this means 30% of your mortgage and other expenses may offset potential rental income.
If none of these reasons convinces you that a cash purchase is right for you, think about how much more you’ll have to pay if you’re not the highest bidder. Suppose a cash buyer is willing to give seller concessions, can offer any price he likes, and doesn’t have to worry about the appraised value or financing contingencies. In that case, it’s definitely worth giving him some serious thought.
