Should You Sell for Cash or Accept A Conventional Home Sale?

The Patrick Grace Group has some great pointers on selling your home because it’s a big decision; it’s one most people will only make a few times in their entire lives. Because of this, many people don’t realize all of the options they have available to them.

Evaluating selling a house for cash vs. making a conventional home sale can be tricky. Before deciding, realize that whether you sell your house for cash or find a conventional buyer, you’ll ultimately receive cash either way.

The difference is a conventional buyer will probably take out financing that will pay off your existing mortgages; a cash buyer will be paying you from cash they already have at hand.

That means a cash sale is likely to go through more quickly and eliminates the chance of the buyer’s lender backing out last minute (even if a buyer is qualified to buy a home initially, there are many potential hurdles that can come up during the loan process). However, a conventional sale may net a final sales price that is closer to your listing price, as an incentive to deal with some of the added hassle.

Selling a House for Cash Vs. Making a Conventional Home Sale: Things to Consider

There are a number of questions you can ask yourself to help you decide whether a cash sale or a conventional sale is a better fit for you and your home.

  1. How soon do you want to sell?
    If it’s important for you to sell quickly, than a cash sale is going to be much more likely to meet your needs. Conventional home sales require a lot of back and forth between the buyer’s lender and the buyer, as well as appraisals and inspections that often aren’t part of a cash sale.
  2. Is selling quickly more or less important than selling for your listing price?
    If you don’t need to sell quickly and it’s more important that you maximize the final sale price of your home, a conventional sale may be a better choice. Since conventional sales often involve mortgages, the buyer may have more flexibility in terms of price.
    However, it’s worth noting that this depends largely on demand in your area; sometimes the monetary difference is minimal or non-existent, and you can often save on a variety of fees associated with a sale. You may also end up paying additional property taxes or upkeep costs the longer you hold onto the home.
  3. What condition is your house in? Many cash homebuyers will make a purchase with an “as-is” agreement, eliminating the need for you to make repairs prior to the sale. This can be important, especially if selling quickly is important to you or if your uncertain what repairs your home might need. Conventional sales often require the buyer to choose a home that appraises for a certain amount based on their loan, so a cash sale may also eliminate that requirement.

Are Cash Sales a Gimmick?

Many sellers are skeptical of cash sales at first—and with good reason. As is always the case when making a large financial transaction, there are people out there who try to game the system.

These scam artists may promise to purchase a home without ever actually intending to go through with the transaction; either they submit a check, then ask for a refund before the check has cleared (and the seller is out the full purchase price of the house).

There are a few other things it makes sense to watch out for as well with a cash home purchase, but by doing a bit of due diligence—such as asking for proof that the buyer actually has the cash, such as a bank statement or other financial document—a cash sale can be every bit as safe as a conventional home sale.

In fact, many conventional home buyers try to game the system as well, offering more than they know they are willing to pay so that a seller will accept an offer, then lowering their bid later on during negotiations, citing concerns with the property or a lower-than-expected appraisal.

They know that once a seller has committed to a buyer, they are unlikely to want to go back to the starting block and take advantage of that to buy for what ultimately amounts to a lower selling price.

Whether you decide to sell your home for cash or to sell via more conventional means, make sure to carefully evaluate both options and remember: no one choice is right for everyone. Choose the option that makes the most sense for you.