Selling a home is never easy. But perhaps one of the biggest decisions that home sellers have to make is whether or not they’ll sell their homes on the traditional market, with 95% of all homes represented by realtors selling through this market. The traditional home selling market usually involves selling a house to home buyers that need to acquire mortgages. Additionally, it will involve working with financial institutions that offer mortgages to buyers. The alternative is to work with buyers that give cash offers for homes.
Right now, the housing market is subject to a fluctuating economy and the limitations that come with the COVID-19 pandemic. But you can certainly still sell your home. The question really is which approach will fit your needs better. Many of us are aware of the traditional home selling market. But what are its downfalls? Let’s explore them below.
1. Timeframes
Timeframes are real issues when you’re selling a home on the traditional market, namely in that there really isn’t a reliable timeframe for selling your home on the traditional market. Housing markets depend not only on how much your home costs and its conditions, but where you live and its economic conditions. A lot of those factors are completely out of your control. You could sell your home in a matter of weeks, or it could take you over a week.
Many of the issues that surround selling a home on the traditional market affect people on a time crunch particularly badly. If your home has been foreclosed upon and you’re attempting to sell your home in order to avoid a major hit on your credit, selling it on the traditional market may not be a good idea. While cash home buyers can often give sellers a selection of closing dates to choose from, there are no guarantees in the traditional housing market.
2. Buyers Backing Out Of The Deal
Home buyers, most often, don’t mean to dupe sellers. The issue is that when a buyer confidently approaches their future lender, they may feel that they’re sure to be approved for a home loan. After all, they have the income necessary to buy a home. Why wouldn’t they be approved?
The answer is: for a variety of different reasons they may not even be aware of. Many home buyers don’t realize that if they haven’t had a credit history long enough or have bad credit, their income can matter significantly less. Additionally, lots of home buyers are denied home loans because they have too high of a debt to income ratio; people that have high amounts of student loan debt may be denied mortgages for just that reason. Therefore, these buyers often fall through, leaving you as the seller high and dry. There is much less of a concern for this happening to those that offer cash for homes, as they have their payment available upfront. The process of working with those that make cash home offers is often more streamlined in general.
3. Real Estate Agent Fees
Did you know that you won’t receive all of the money that comes from the sale of your home? Oftentimes, lenders charge closing fees when closing the sale of a home. Taxes will obviously be cut from the sale as well, as will any fees associated with outstanding liens or more.
Additionally, however, real estate agents will take a commission from the sale of your home. This cuts into your profit margins even further. When working with home buyers that offer cash for homes, you may not need to worry about the amount you would give up in agent commission if the buyer actually plans to hold onto your home as a rental, or if they can renovate the home and sell for a higher price.
4. Repairs and Renovations
When a house is place don the traditional market, typically buyers will be looking for homes that have had recent repairs or renovations executed. Therefore, it can be hard to ensure that your home can compete without those investments.
Most cash home buyers actually prefer homes without repairs. This is because they’re able to take the cost of the home’s issues and apply it towards their next profit.
Selling a home will always be intimidating. But don’t assume there is only one way to sell. Look into alternative means of selling your home.