Selling Your House Off Market For Cash: A Complete Guide
When it comes to selling your house, you always have options. Whether it’s a slow market where inventory sits for weeks with little-to-no competitive offers or a white-hot market like the one we’ve experienced recently, you, as the homeowner, always have options.
While most people go the traditional route of hiring an agent, listing on the MLS, and sticking a for-sale sign in the front lawn, there are other approaches that may work better based on your unique circumstances.
Selling off-market, for cash, is one of them.
What Does it Mean to Sell Your House Off Market?
According to the latest data from the National Association of Realtors (NAR), 91 percent of all homes for sale are listed using the multiple listing service, or MLS. That means less than 1-in-10 homes are sold off-market as part of a for-sale-by-owner (FSBO) transaction. However, that doesn’t make it a bad option. It just means most people aren’t aware that it’s an option and/or haven’t explored the benefits of going this route.
While we’ll discuss the “why” of selling your house for cash in the following section, let’s begin by setting the record straight on the difference between selling your house on the MLS and selling it off-market.
On-Market Properties (MLS). When someone refers to an “on market” listing, they’re almost certainly referring to property that’s been listed in the MLS database. This comprehensive “library” of listings is really a conglomeration of 700-plus regional databases that span all the way across the U.S. Any licensed real estate agent or broker with a membership to the database can access it and find potential listings for their clients.
When a buyer’s agent searches for properties, the MLS is their go-to resource. If a property is not on the MLS, the only way they’ll know about it is if someone in their personal network tips them off to an off-market listing. Thus if you’re going for mass appeal and want to reach as many traditional buyers as possible, the MLS is the way to go.
Off-Market Properties. While 9-in-10 homes are sold using the MLS, there’s no requirement that says you have to put your property into this database in order to sell it. In fact, there are plenty of situations where it makes more sense not to list on the MLS.
An off-market listing is any listing that’s sold in a FSBO capacity. And while off-market transactions can certainly involve traditional financing, many of these deals are done in cash. Sometimes the buyer is simply someone who has the cash to purchase the home as their primary residence, while other times it’s a cash investor who may choose to flip the house or rent it out. Either way, cash is cash. As a seller, that’s all that matters.
4 Major Benefits of Selling a House for Cash
While the MLS can be a helpful resource for generating buzz around your property, it isn’t always the best choice for listing a house for sale. Houses that are a good fit for the MLS have often been renovated, are in livable condition, and are certain to pass off on an inspection. But not every homeowner or property fits these criteria. Thankfully, off-market cash transactions are an option.
People make the decision to sell a home fast for cash for any number of reasons. Here are a few of the most common ones we see in Greenville, Spartanburg, and really any individual market in the state of South Carolina.
Sell House for Cash Benefit #1: Quick Close
Did you know that it takes an average of 45 days for an on-market home to close after going under contract? And in many cases, it’s more like 60 days.
If you’re trying to sell your house fast, you probably don’t have the luxury of waiting around seven, eight, or even nine weeks for a property to close. At best, it’s frustrating and inconvenient. At worst, it could put you deeper into a financial hole and become a costly burden for your family.
Selling a house for cash means a much quicker close. There are no approval processes, appraisals, or prolonged due diligence periods. Depending on the cash buyer, the entire process could take as few as seven days.
A quick close like this means you get your equity out of your house sooner so that you can access it much faster. And whether you’re using it to buy another property, pay down debt, or finance some other type of investment, fast cash is a good thing!
Sell House for Cash Benefit #2: Less Uncertainty
Any time a bank or lender gets involved in a home sale transaction, things are going to be way more complicated than they should be. Not only is it likely that the home sale will be contingent on appraisal, but there are any number of other risks that could emerge during the due diligence phase.
In the business world, there’s a popular adage that says “time kills deals.” This is certainly true in real estate. With each passing day that a house sits under contract, there’s more time for some small issue to compromise the deal. Selling a house fast for cash closes this window of time and therefore reduces your risk.
Sell House for Cash Benefit #3: No Inspections or Repairs
If you’ve lived in your house for several years, then chances are there’s a long list of problems with it. From small things like leaky faucets and holes in the drywall to major issues like broken appliances and windows that need replacing, it can feel as if your house is slowly falling apart.
Trying to sell a house in this condition on the MLS is difficult. Sure, you might find someone who is willing to buy it, but the inspection process and repair requests will be a nightmare. Not only will it take forever, but you’ll likely be expected to cover these repairs out of your own pocket.
When you sell a house fast for cash, there are no inspections or repairs. (The buyer will probably want to look around and take some pictures, but there’s no formal inspection. And the cash buyer certainly doesn’t expect you to repair anything before selling.)
Sell House for Cash Benefit #4: No Real Estate Commissions
When selling a house with a real estate agent on the MLS, you’re generally required to pay a six percent commission (three percent to the buyer’s agent and three percent to your agent). On a $175,000 house, that’s $10,500 coming right off the top at closing.
When selling a house for cash, there are no commissions. This instantly allows you to keep more of the cash at closing. (Need we say more?)
The Biggest Challenges of Selling a House Off Market, for Cash
There are clearly numerous benefits to selling a house off-market, for cash. However, we won’t pretend it’s all smooth sailing. As with anything, there are always going to be a few challenges and speed bumps in the way. Here are some of the ones you’ll face when selling off-market:
- Fewer buyers. When you have an off-market listing, there are going to be fewer buyers. This means fewer people to compete against one another and drive up your price. This isn’t a huge deal, but is worth factoring in.
- Lower price. Because there are no inspections, repairs, appraisals, and other buyer “safety nets” involved, you might have to take a small “hit” on the sale price. Thankfully, the majority of this diminished price can be offset by the six percent you save on commissions.
- Headaches. In general, selling your house for cash in an off-market capacity is going to come with unique challenges. Not only will you have to filter out the unqualified buyers (i.e. tire kickers), but you’ll typically find yourself working with people who don’t have agents. And if they don’t know what they’re doing, this can lead to lots of confusion.
The good news is that most of these challenges can be eliminated or neutralized by working with the right cash home buyer. In other words, if you find someone who is ethical and has your best interest in mind, these will be non-factors.
The question is, how do you find the right cash buyer?
How to Find the Right Cash House Buyer
When selling your house off-market to a cash buyer, there are several things to evaluate and consider. This includes:
- What kind of cash buyer are they? There are different “classes” of cash buyers. iBuyers, for example, are real estate investment companies that will typically make an offer on a home sight unseen. They do this using MLS data, automated algorithms, and other objective factors. You can typically get an offer from an iBuyer online. Once an offer is accepted, they’ll generally send out someone to inspect the process and then (most likely) revise/lower the price based on what they discover. This is often a very disappointing process.
You can also find cash buyers at real estate auctions and courthouse sales. However, this can be an expensive process with hefty auction fees.
A third option is to work with an independent cash buyer who lives in the community and is local to the area. These cash buyers stake their reputation on treating homeowners fairly, and with no “middle-man fees” or expenses, they tend to be quite reasonable.
- Do they feel honest and trustworthy? You can tell a lot about someone’s intentions by how they interact with you. Does the cash buyer answer your questions? Are they respectful of your property? Do they give you time to think without pressuring you to make a quick decision?
- Are they local? It’s always good to work with a local cash buyer who lives in the community and knows the area. This makes the entire process go much more smoothly.
The Process of Selling a House for Cash
Now that you know what selling a house for cash looks like, why it’s so beneficial, and how to evaluate prospective cash buyers, let’s explore the actual step-by-step of what goes on. In other words, how can you expect the process to unfold from start to finish?
Generally speaking, selling your house as-is for cash will look something like this:
Step 1: Send Information
If you want to be proactive about selling your house for cash, you should start by contacting someone who buys houses for cash in Greenville, Spartanburg, or the surrounding areas. Most cash buyers will have a submission form on their website that you can use to reach out to them.
When sending over your information, be prepared to provide basic information about square footage, bedrooms, bathrooms, general condition, unique circumstances (like tax liens or complicated financing), your timeline for selling, etc.
Step 2: Wait for the Buyer to Contact You
The cash buyer might be able to make you an offer after doing some basic research and due diligence on the property. However, more than likely, they’ll want to lay eyes on the property and walk around. If interested in the property, they’ll contact you to set up a confidential appointment.
Step 3: Obtain an Offer
Once the individual has gathered all of the necessary information, they’ll crunch the numbers and return with an offer. Most of the time, this is a bottom-line offer (meaning there isn’t much room for negotiations). However, if you feel that it’s unfair or would like more clarification, you can always start some dialogue and see if the buyer is willing to modify their offer.
Step 4: Wait for Closing
Once both sides agree on an offer and sign a contract, it’s simply a waiting game. Depending on the agreement, closing could be as little as seven days away. Or, if you need more time, it may be scheduled for several weeks out.
Step 5: Walk Away With Cash
Once the transaction is complete, you get a check for the equity in your home and the title transfers to the cash buyer. Easy, peasy!
Partner With Samuel Property Group
At Samuel Property Group, we believe in people over properties. This means you’re the priority – not your property. As part of this mission, we buy houses for cash. This allows homeowners like yourself to sell a house fast for cash while still benefiting from the upside of the equity you have in your home.
If you’re feeling stuck between selling your house on the MLS and going the non-traditional way of selling off-market, we would love to start a conversation. Our goal is to help you get “unstuck.” We want to relieve some of this tension you’re feeling by giving you an honest, high-integrity, and ethical approach to the process of selling your house fast.
For more information, or for a cash offer on your current home, please contact Samuel Property Group today!