Post # 1
Random question, but a family member of mine has been getting letters saying that “We will buy your house for x amount for cash”
I don’t understand why it would matter if they had cash or had to get a loan to buy the house…. doesn’t the seller receive the money regardless at closing?
PS I have never bought a house by myself so I don’t know all the intricacies
Post # 3
lauralaura123 : it could be a scam, but there are also house flippers who send these letters out to find what they call “motivated sellers”- people who for whatever reason are looking to sell quickly. Cash buyers mean you don’t have to wait for buyer financing to get sorted out or worry about if the house gets appraised for less than what the buyer is trying to get a loan for (lenders don’t like that) or worry about inspection issues that the lender might not like.
Post # 4
Well there is a difference when selling your house for cash vs mortgage. People will generally accept a lower cash offer as a purchase with a mortgage can take months and could fall through.
It could be a scam but some buyers use a method called leafleting when buying a home if they want to buy in a specific area and cash might motivate some people to sell as it’s a sure thing.
Post # 5
zzar45 : when my family was buying a house, we got a mortgage and there was no delay on closing…Maybe it’s different now?
Post # 6
You can’t predict if there will be a delay though, you could ‘sell’ your house and then your buyer could find a problem with a survey down the line, they could face problems with their financing, or potentially their buyer could pull out which means they can’t continue with the purchase. Many sales go through with no problems but many do not, your family buying a house and having no delay is irrelevant for any other situation. It isn’t different “now”, there has always been the chance that something could go wrong. That’s just the purchase process.
A cash buyer with proven funds means you can eliminate these potentially risks and guarantee the sale goes through. Not everyone will be interested in this route but if you need a quick sale you might be inclined to take 10/20k etc less if it means access to the money sooner.
Post # 7
- Wedding: August 2020 - Hampton, VA
Yeah that’s just marketing from a local real estate investor. They use the franchise marketing dept to mail to certain areas from which they’re interested in capturing leads.
Post # 8
lauralaura123 : Typically at least where I live it’s about 45 days to close when getting a mortgage but I think it’s almost immediate if you pay with cash, especially if there’s no inspection.
An example on things falling through- I put in an offer on a house and a few weeks in I had to sign some paperwork and it turned out my mortgage payment would have been an extra $100 or so because thet had the taxes listed wrong so I ended up walking away and they had to find a new buyer. Also walked away from a house after an inspection and seller wouldn’t compromise.
Post # 9
Where I live, all cash offers were exceedingly common at least a couple of years ago. Yeah, the seller receives cash either way but closing on a mortgage takes a month.
We once lost a bid on a house because though the competing offer was exactly the same as ours, it was all cash. Wealthy overseas buyers have been buying up a fair amount of my neighborhood.
Post # 10
When you get a mortgage to buy a house, you don’t actually own the house, the bank does. They have to be included on the insurance policy, they require the inspections and appraisals. If the house doesn’t appraise for the right amount, they can deny you the loan. If an inspection doesn’t go well, they can deny the loan.
If you pay cash, you own the house outright and don’t have to follow any rules. You don’t need to get an appraisal or worry about inspections (you should always get one just for your own personal use, but it’s not required).
Cash closings are much easier.
Post # 11
Cash sales usually mean an as-is sale, no negotiation, no appraisal, none of the things that could derail a traditional sale. When you take out a mortgage, the loan can be denied at any time till the contracts are all signed. If something comes up during the inspection (like water damage or mold), the lender can back out.
A cash sale to a filipper/developer is usually priced a bit below market value. The ads are targeted to homeowners that the flipper thinks may be under some financial pressure and who might not have the cash on hand to make the repairs that would be needed to get a higher price through a traditional sale.
Anon721 : actually these types of offers are usually on the level. They may be a little predatory, but they’re not scams.
Post # 12
lauralaura123 : selling for cash often means there’s less risk of the offer falling through (you’d be amazed how many people put offers on houses before actually being approved for mortgages!)
Post # 13
My husband and I just sold our home. It is certainly possible that if a buyer is pre-approved for a mortgage, then that mortgage financing can fall through for a variety of reasons (a miscalculation somewhere, buyer buys something large/expensive that wasn’t initially factored in, or buyer loses his job).
If you have to wait to see if one person can figure out their mortgage details, while another one has cash…. many people will prefer the cash 🙂
when my husband and I were selling our place, we were contacted by a ‘cash for houses’ place. they typically give you a low ball offer, but do give you cash. If a person is under water, they see a cash offer in a situation like this as an easy out.
Post # 14
Wow! I didn’t know so many people go looking for a house not knowing if their mortgage will be approved! Thanks Bees for enlightening me
Post # 15
lauralaura123 : A lot of mortgages are contingent on appraisals and home inspections. It’s not that people go around looking for homes without preapproval, it’s more like preapproved buyers make offers on homes that have hidden deficiencies that are caught before the loan goes through. Mortgage lenders want to protect themselves and their buyers.