People still ask me, ‘Josh, can I can a cash offer on MY home??” Hell yeah you can. Do you really want one though? Eh, that’s up for debate. Let’s talk about why.
You’ve seen the signs. They all look about as good to be true as a $2000 deck on Facebook Marketplace. I got ripped off by that guy too. There are some things you should know about getting cash offers on your home, and why they look the way they do.
Cash offers often come with little to no contingencies. But, especially if it’s a full price or over asking market value price for your home, they often come with special addendums that actually require the purchase price to change should the buyer decide the investment will require more capital. What I mean is, if they find in their inspections that they will have to do additional repairs after the sale, they’re going to reduce their offer price, and the big boys aren’t making this negotiable. It’s a hard and fast gun to your head when you accept the offer. It doesn’t make this offer a bad one, but you need to read the details of the contract. Stipulations can add contingencies where others were removed.
You can also get cash offers from investors – again, often with no contingencies – but at significantly less than market value. Those guys came up with a number that is considerate and reflective of the after repair value, or ARV. That’s a fancy way of saying they need to make sure they make their money back when they flip it. This type of offer is often used when purchasing a home that is vacant or clearly has deferred maintenance. But investors will make below asking price offers on any house they feel might fit within their “buy box”. That’s another industry term, it’s just refers to what they’re looking for in a property. So if you go to market your home and get a low ball cash offer, that’s probably why, they might think they’ll have to fix things. But they also know that you would love a fully non-contingent cash offer that will close in a week.
Here’s the thing that you should know. I’m not assuming anything about you or your home, but there are – what we call – latent defects. Things you can’t see that will become known when someone hires an inspector to look at the property for them. In normal market conditions, that’s what the resolution period for in a standard purchase and sale agreement. The buyer and seller come to terms on what needs to be repaired that has been found in the inspections. Most cash offers are going to treat inspections as pass or fail, though some offers will accept a home “as is”. But you still have to read through the offer addendums if there are any, and read through any non-standard offers that are submitted as well. I’ve seen everything from our standard Tennessee Real Estate Commission approved forms to an investor outlining all the terms within an email. That was a hard read.
The point is this: Cash offers can close fast if you need that, they can meet your expectations for Netting a certain amount on the sale, but they do come with special considerations.
Want a cash offer on your house right now? Call me, I’ll make you cash offer right now. And I don’t add unnecessary addendums, I’ll tell you what I would spend to Net what I need when I flip it. And if you don’t like the cash offer, I’ll tell you what we can sell it for on the market, and I’ll help you sell it. Because, hey it’s your property and I want to see you maximize on that investment