The Complete Guide to Getting a Cash Offer on Your Home

Are you looking to sell your home fast? Is your house in distressed or damaged condition and you don’t have the time or resources to fix it up? A cash sale can be an ideal solution.

What is a cash offer?

A cash offer is exactly what it sounds like: A buyer offers to purchase your house outright, without traditional financing, in an all-cash purchase. It’s typically an off-market sale, although it’s possible to list a house on the Multiple Listing Service (MLS) and receive a competitive offer in cash from a motivated buyer.

How a cash offer works

The prep work

Cash offers are typically as-is sales, so you can often skip the repairs, curb-appeal upgrades, and showings involved in traditional real estate marketing. It is a good idea to do a pre-sale inspection to identify any issues that might impact the value of the home (these inspections are often paid for by the potential buyer).

The offer

A cash investor might approach you directly with an offer to purchase your home; alternatively, you can seek out a cash offer from a cash offer company or from an instant buyer, also known as an iBuyer. Or, you can list your home for sale through a marketplace like Sundae. While the others will typically give you one take-it-or-leave-it offer, Sundae has a network of trusted investors with available funds who will bid on your house, so you can get the best deal possible.

The agreement

Once a purchase offer is made and accepted, you sign the purchase agreement and open an escrow account, where the buyer’s earnest money is held. While in escrow, a title report will be generated, to ensure that you, the seller, have free and clear ownership of the home. If there are any liens or other outstanding debt connected to your house (such as unpaid property taxes or HOA fees) you will have to pay these before the sale can be completed.

The closing

Because a cash buyer does not have to go through the process of getting a bank appraisal and securing mortgage financing, but is buying the home outright, the closing process is generally faster than the traditional home buying process. You can close in just days or weeks, as opposed to many weeks or even months with a traditional sale.

With Sundae, most closings can happen within 10 days of the accepted offer, but if you need more time, that can be extended to up to 60 days.

Who makes cash offers in real estate?

Many potential buyers willing to make a cash offer are looking for investment properties, either to repair and resell (also known as flipping) quickly, or sometimes to hold as rental properties. They might be individual investors or investment companies, such as Real Estate Investment Trusts (REITs).

Some buyers seeking out cash sales are predatory, so be on the lookout for scams. They might try to get you on the hook for the purchase with an attractive price, only to negotiate that price way down through seller concessions later.

How is a cash offer different than a mortgage offer?

When a potential buyer makes an all cash offer, they will have to demonstrate proof of funds and will generally make an earnest money deposit, and you’ll enter into an escrow arrangement until the sale is finalized, just as you would with traditional mortgage financing.

The biggest difference between the two is that because the potential buyer has the cash in hand, they won’t need to get mortgage pre-approval, wait for a bank appraisal to ensure that the purchase price is in line with what the lender determines the home is worth, or deal with any related financing delays.

Another way that cash allows for a streamlined process is that cash sales are generally as-is, so needed repairs won’t delay the closing timeline or derail mortgage lender approval.

Should you accept a cash offer on your house?

It can be a good idea to accept a cash offer if you need to sell your house fast. You might be facing challenging financial circumstances like foreclosure and hoping to sell to head that off, for instance. Or you might have a new job offer and need to relocate quickly, or have made an offer on your next dream home, and need a quick closing on your existing home in order to meet the financing contingency. If you find a buyer who can offer cash, with no mortgage loan, you’ll likely be able to move through escrow and close the sale fast.

Another good reason to accept a cash offer is that you’re low on funds. While a traditional sale, especially in a competitive market, often requires the home seller to do repairs and curb-appeal upgrades in order to attract the most buyers, you might not have the money to pay for that work. In that case, an as-is sale for cash can work for you. A cash sale typically means lower holding costs, as well, since the process moves more quickly, and the closing costs are often paid by the buyer.

It’s important to realize you are unlikely to get the same price for your home in an all-cash deal as you would when the sale is financed with a mortgage loan and marketed in the typical way. Working with a traditional real estate agent and listing your home on the Multiple Listing Service (MLS) is usually the way to get the highest purchase price available, but most buyers in that market are not looking to pay cash. The trade-off for accepting a lower, all cash offer is that you can have the money in hand and deal done fast.

The positives to getting a cash offer

A cash offer is fast

You won’t have to invest your time in prepping your home for market. You also won’t have to wait while your buyer meets their financing contingencies and other details of mortgage approval.

A cash offer is more of a sure thing

There are many reasons a sale financed with a traditional mortgage loan can fall through, even if the buyer has a pre-approval letter in hand: The bank appraisal might come in low; the inspection might reveal issues that compromise the loan approval; or the buyer might not meet other financing contingencies. Once there’s a cash offer accepted, on the other hand, there aren’t as many obstacles that can spoil the deal.

A cash offer means fewer seller expenses

Especially if you’re in a seller’s market where demand for homes is high, you are likely to be able to find a cash buyer willing to take on the expense of any needed repairs. The buyer will often take care of the closing costs as well.

Potential Downsides to a cash offer

The biggest downside of a cash real estate transaction is that you are likely to get a lower asking price than you would with a mortgage-loan financed deal. Cash buyers are typically looking for opportunities to save money on their purchases so they can invest in repairs and sell for a good profit. Also, if you accept the first cash offer you receive, you might miss out on other buyers who were potentially willing to pay more.

Working with Sundae is one way to mitigate that risk. Because we list your home for auction on our marketplace of trusted cash investors, who then compete for the purchase through bids, you can receive multiple offers on your home and select the best one.

Is a cash offer always a lowball offer?

Not always. While predatory home buyers do often try to get away with very low offers, you never have to accept an offered price. The best way to ensure you’re getting the highest as-is, cash price available is to seek out multiple potential buyers who will compete to make the best offer, as they do on Sundae’s marketplace.

Should I work with a traditional real estate agent if I want to sell for cash?

If you’ve already listed your home with a traditional real estate agent, you can still seek out a cash offer and an as-is sale. It is not necessary to work with an agent to sell for cash, however, and it may not be the easiest way to reach a large pool of potential cash buyers. While your real estate agent may know a potential cash buyer or two, or they might be able to secure an offer from a REIT or iBuyer (if your home meets their specific buying requirements), cash deals are not typically the specialty of a traditional agent.

You might find you get a better price seeking a cash offer directly, or listing your home as-is through Sundae’s marketplace, where motivated buyers can compete to get you the best cash price available.

Is accepting a cash offer a legitimate way to sell a home?

Cash offers absolutely can be legitimate. Of course, there are scammers out there looking to take advantage of home sellers, especially those in a hurry to sell or with distressed or damaged homes that they cannot afford to repair, so take care not to fall for their predatory tactics. Know that legitimate buyers generally work through established companies and present themselves professionally. If you see a phone number posted on a sign by the road offering cash for houses, you should be skeptical about the legitimacy of the deal they are offering.

There are a number of cash offer companies, such as We Buy Houses and HomeVestors, as well as iBuyers such as Opendoor and Offerpad, that are established in the marketplace and make legitimate offers, although they are likely to provide only one, take-it-or-leave-it offer to consider. They also typically charge fees to home sellers.

Working with a marketplace like Sundae helps alleviate some of the stress of finding a legitimate buyer because we have a large network of trusted cash buyers that we work with, and those buyers compete to offer the best price for as-is condition homes. And sellers never pay fees to Sundae.

How do I know if this cash offer I just received is legit?

You should always be wary of a cash offer on a house that comes unsolicited, or from a source you aren’t familiar with. You’ll want to check them out as you would any business:

• Verify reviews or references;
• Inquire about their track record with the escrow company they use;
• Check with the Better Business Bureau or local Department of Consumer Affairs for complaints that may have been lodged.

Watch out for red flags, as well:

• Are they asking for a verbal agreement? A legitimate offer should be in writing.
• Are they asking you to pay an upfront fee? If the company offering you cash for your home asks you to pay a fee of any kind, such as a fee for an initial inspection of your home, that is not a good sign.
• Are they hard to reach or not local? Some signs you might be dealing with a scammer are if this supposedly interested buyer cannot be contacted directly, or if they are away or even out of the country and cannot visit in person.
• Are they unable to demonstrate proof of funds? It’s smart to hire a real estate attorney to oversee the paperwork and escrow account in any real estate transaction, and to ensure that the cash buyer can demonstrate proof of funds to make the purchase.
• Does their source of funds seem sketchy? Cash home purchases are typically paid for with a wire transfer or cashier’s check, as those offer more security against fraud than other methods of payment.

A cash offer with Sundae means peace of mind

If you need to sell fast, especially if your home needs work and repair and you don’t have the time or resources to get it done, listing your home through Sundae’s marketplace offers a convenient cash-sale solution. Our network of cash buyers is trusted, local, and motivated to offer the best price. You can get multiple offers on your home, so you know you haven’t fallen for a lowball offer scheme or otherwise left money on the table.