In this article, I will share what is a cash buyer only house and how to find one in your country. Plus, some advantages of cash buying and some disadvantages so that you can understand the game better with a special tip on due diligence at the end.
Have you ever noticed that some sellers list their homes with Cash Buyers Only text? If yes, then let me tell you that person only wants to sell the house if you have all the cash available. Here is a detailed explanation.
What is A Cash Buyer Only House?
Cash Buyer Only House means the seller will not accept an offer from a buyer who needs to apply for a mortgage or obtain funding from a third-party lender as he does not have all the money.
Also, the seller will reject the offer if the buyer is waiting for an inheritance property that is yet to sell or some magical employment bonus that is arriving soon, so he can pay the owner.
No, the owner wants the cash immediately. That is what means cash buyer only house. The buyer must prove that he has the full money right now to qualify for this. It’s a matter of immediate effect. He wants to sell it right now. That is why he labeled it Cash Buyer Only House.
But how will he make him believe that he has the money? For that, the buyer needs to show him his recent bank statement or anywhere the cash is available to withdraw.
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Advantages of Cash Purchase of A House
There are certain advantages of cash-purchasing homes if you have the money. Here are some of the most important benefits you must know before purchasing a cash-only house.
Also, read: How to buy a house as a beginner
1. The Deal is less likely to Fail
The sale is less likely to fail. If you buy a house with a mortgage, it will take a lot of time and a risk of rejection from the bank. But here no banks are involved, and you don’t have to get stressed to arrange the money for closing the deal. That is why cash deal always happens.
2. No Stress for Mortgage Payment
As the buyer will have no stress, the seller is also stress-free because he knows that the buyer has the money and he is not in the line for the mortgage. That makes the buyer prefers the seller.
3. You Hold the Power
You have got the negotiation power. As you have all the cash, you can negotiate with the seller to reduce the price, and the seller will agree because he wants cash right now. So here, you have a big advantage over the seller.
4. It is much Faster than Others
Buying and selling a cash-only home is faster, safer, and easier than other property investments, as there is no waiting period. You can close the deal within a week, which might take a few months if you go for a mortgage.
5. Saves Your Money
Save a lot of money as a buyer. There is no interest as there is no mortgage. With that, you are also eliminating some of the fees that come along with homes purchased with a mortgage.
6. Got Total Security
You will have security. No matter how bad things get, you will have a roof over your head until you decide to sell it. It is the beauty of buying homes for cash.
Understand these advantages of cash buyers for houses and then decide how amazing cash buying is.
Disadvantages of Cash Purchase of A House
But wait, don’t get too excited. There are some disadvantages of a Cash Buyer Only House that you must know. No matter whether you know the advantages or not. Here are the most important of them.
1. Huge Amount of Money is Needed
It’s not easy to arrange something like $100,000 for average buyers. That is the single reason people can’t make cash purchases. Make sure you are budgeting properly. So you can afford it alongside your living costs. If you have that money, you are in luck, if not you can arrange it, I will tell you how.
2. Your Money is Stuck in a Single Property
All of your money will get stuck, and you can’t use them to buy more properties as most investors do. They buy five properties with that $100,000 by paying $20,000 as a down payment. The remaining money they can get from the bank. That way, they buy more properties with little money. You don’t have that option.
3. Can’t Miss A Small thing on Due Diligence
Here you can not miss analyzing the property. As the seller wants to sell the house quickly, there is always a chance of fraud. The devil works faster, not you.
That is why you must analyze everything single thing before closing the deal. How to analyze a cash buyer property? I will discuss that later in the article.
So these are the disadvantages of buying a house in cash. I think these are nothing for a sophisticated investor if you do the due diligence properly.
How to Buy A House with Only Cash
Now the main question appears how do I buy a cash buyer only house in my area? If you have the money, you can buy it right away. But if you do not, then you can use the following examples.
For example, you sign a contract to buy a cash house for $100,000. That means you need $100,000 right away. You don’t have $100,000 in your hand. The only option you have is Hard Money Lenders, as you can not apply for a mortgage which will take a lot of time.
- Hard money loans differ from traditional bank mortgages. They focus on the property, not the borrower.
A hard money lender looks at the estimated value of the property and also after it’s being repaired (if it’s a rehab house). Then, they focus on your exit strategy. You will fix up the property to sell it or rent it out.
They will give the money, and the seller will not disagree as he is getting his money at the right time. But some sellers may disagree with you, as you don’t have the bank statement to show for the proof. Your money is on the way, but you don’t have the proof right now. That’s a catch here.
That is why when you have the total cash, you can go for it. Otherwise, I think most sellers will not agree. Now assume you have the money anyhow. How to find those homes online?
How to Find A Cash Buyer House Online
There are lots of online portals to find a cash buyer only house, and some are as follows. But you are free to choose other websites if it’s available in our city.
Use these sites and find our cash house to buy to sell.
Due Diligence of Cash Buyer Homes
After seeing a few homes to buy, you need to run some checks on them to know are those houses are as like that as they tell you. If not, then you may lose money there. That is why a simple Due Diligence is required.
1. Do a Quick Physical Analysis of the House
In physical analysis, check these three fast.
- Check for plans, restrictions, and other environmental information that might affect the property.
- Check if the property is connected to the main water supply.
- Check the Land Registry Title Plan shows the boundaries of the land.
2. Sold Last Time with Date
When was the house sold last time? Get the data. If the current owner is selling it, for less than six months, then something is wrong with the house. Check it fast.
3. The Material Used to Develop the House
It’s important to analyze what materials they have used in that house. It all looks alike from the outside. Ask the seller directly and do your own inspection to find what quality of the martial is used in that house. You must get the value that you are paying for.
4. The Current Condition
Look for any damages, like natural wear and tear, weather damage, and modification problems. These can cost extra you extra if you neglect them. Find them and negotiate with the seller to reduce their price.
5. No Hidden Cost
Make sure there is no hidden cost. If a property management company is managing the property, it’s likely there will be hidden fees. Check them well, and also other hidden possible fees, that you don’t want to pay.
So use these five tips for researching the house. Do your due diligence properly, and try not to get scammed while purchasing a Cash Buyer Only House.
Companies who Buy Homes for Cash
Here are a few companies that buy homes for cash instantly. There are many companies in the world, but there are the best, I think.
- We Buy Houses
- MarketPro Homebuyers
Choose anyone you like and sell or buy a house for cash.
Why People Are Offering Homes for Only Cash
You might be thinking why people offer cash options and what they get out of it. Here are some scenarios that force people to sell their houses for cash.
- Mortgage finance applications are currently taking longer.
- The seller had a divorce recently and would prefer a cash sale to avoid the delays that come with the mortgaged buyer.
- Need cash instantly. Mortgage buyers are slow, and purchasing with cash is the only way to make the process fast.
- The property needs rehab, and he does not have the money to repair it. And also, he is struggling to sell it to the average buyer because of the damage.
- They are relocating to a different city. That is why they need cash soon.
- Need money for hospital purposes, or anything unexpected has happened with them. They need money right now. Then cash selling is the only way to solve this problem.
These are the main reason people see homes for cash buyers only.
So now you know what is a cash buyer only house. What are the advantages and disadvantages of it, and how to find and buy one in your local area? Cash buying is difficult, especially arranging the money. But it’s one of the most profitable investments. Good luck. See you soon.