Hello, I’m Jake McVey, Bolingbrook’s Realtor, and owner of The McVey Group at Coldwell Banker. In today’s discussion, we’ll delve into the often-touted advantages of selling your house to cash investors. While the promise of a swift transaction may seem appealing, it’s crucial to separate fact from fiction and explore the potential drawbacks.
Addressing and Debunking the “Pros” of Selling to a Cash Buyer Off-Market:
Quick Sale Myth: One commonly cited advantage is the speed of the transaction. Cash buyers can indeed close deals rapidly, often within days. However, the urgency may lead to selling below market value. It’s important to weigh the convenience of a quick sale against the potential impact on your profit. While time is a factor, maximizing your return is equally crucial. Not only are you leaving money on the table- it’s often not for a quicker sale. Priced correctly, it’s extremely likely you can get a comparable timeline with SIGNIFICANTLY more money on the public market.
As-Is Sales Illusion: Cash investors often boast the benefit of buying homes in their current condition, eliminating the need for repairs or renovations. However, it’s a misconception that selling through a realtor requires extensive upgrades. The truth is that you can sell any house, as-is, on the market. In fact, listing in its current condition might lead to a significantly higher offer than the one presented by the cash investor you’re currently dealing with. It’s essential to consider all your options before committing to a lower offer for the sake of convenience.
Certainty vs. Drawbacks: While cash transactions seem to provide a level of certainty, it’s crucial to consider what is sacrificed for that certainty. Many of these investors use contracts which emphasize their protection. The truth is, many of these so-called “investors” don’t plan to, nor do they have the money to, purchase your home. A large portion of people advertising that they will buy your house cash are actually “wholesalers” which means they focus on finding homes extremely below market value, putting them under contract, and then assigning that contract to an end buyer for a higher price. I’ve seen wholesalers price homes as high as 73% OVER the contract price when looking for an actual end buyer. That could mean that although you have an you’re leaving an EXTREME amount of money on the table. However, what happens if these investors don’t find an end buyer? The reality is, the contract likely provides an out for them and you’re back to square one.
Avoiding Commissions and Costs: Bypassing real estate commissions may seem like a cost-saving measure. However, it’s important to weigh this against the potentially lower sale price and the expertise a realtor brings to the negotiation table. Realtors are skilled in pricing strategies, marketing, and negotiation, factors that can significantly impact the final sale price. While the idea of saving on commissions is attractive, the long-term financial benefits of a higher sale price may outweigh the upfront savings. These investors may try and convince you that you’re getting the better deal with them, because although you could sell for more on the market the commissions will cost you, but the reality is that it’s rare in today’s market that you won’t make significantly more going public. Think about it- these investors are in this to make themselves money, if they see a deal and want your house, how many other potential buyers will there be once the world knows the home is available? Coming to market allows competition and drives the price up.
Selling your house is a significant decision, and the promise of a quick cash transaction is typically not the best choice. It’s crucial to approach these “pros” with a critical eye, considering the potential impact on your profit and the overall value of your property. Working with a trusted local Realtor ensures a fair and transparent process, maximizing your profit and minimizing potential risks. If you’re considering selling your home, I’m here to guide you through the process. Contact The McVey Group for expert assistance tailored to your unique needs.