Are you a home seller with your house on the Minnesota real estate market? If so, you may be realizing that even though we are in a seller’s market, home selling can be a very time-consuming and overwhelming process. Whether you’re looking to move, need more space, or perhaps in a financial bind, waiting for buyers to bid on your house can be nerve-wracking!
If you think there must be an easier way, there is. Accepting a fair cash offer for your home has many benefits and can streamline the sale process considerably. And, while it is an excellent alternative to a traditional home sale, you may not be familiar with cash deals.
If that’s the case, fear not. Read on to discover the benefits of accepting a cash offer on houses in MN and how this strategy can help you sell your home easily and quickly.
Reasons to Sell Your House for Cash
Most people do not enjoy the house selling and buying experience and hope to move through this process as quickly as possible. Unfortunately, securing financing often delays closing and can be tricky for the home seller and buyer to navigate. Selling your house for cash circumvents this problem and can significantly shorten the length of the transaction.
So, before diving into why you might sell your house for cash, let’s take a look at what exactly happens during a cash deal. Selling a house for cash is like any other home sale except the cash buyer purchases it without utilizing financing. This means that no negotiations with lenders are required, and cash buyers will pay for the property via electronic funds transfer or a cashier’s check.
Given the relative simplicity of this type of deal, there are many reasons you might sell your house for cash, including:
- Needing to sell quickly
- Desire to avoid potential financing issues or delays
- Greater ability to negotiate the price
- No need for a realtor
Types of Companies That Buy Houses for Cash in Minneapolis
As the name infers, companies that buy my home in Minnesota purchase them without financing. The principal advantage of selling a house for cash is the quick and straightforward nature of the transaction. If this sounds good to you, you will be glad to learn that there are several types of companies that buy houses in Minneapolis for cash.
House Flippers
Many times these are sole proprietorships or small firms of just a few people. They purchase older or run-down properties at a relatively low cost, redesign or remodel them to increase their value, then quickly resell the houses at a profit. House flippers tend to search for residences where upgrades like restorative updates, mechanical fixes, or an addition or layout change will significantly increase the resale value.
Every significant city and most average-sized metro regions have house-flipping organizations, and you’ll likely also discover some smaller, lower-volume flippers in more modest urban areas and towns. The most popular US house-flipping organization is HomeVestors (also called the “We Buy Ugly Houses” organization), which has establishments across the country.
Purchase and Hold Organizations
Purchase and hold groups buy houses with the intent of leasing them for a profit. Often, these groups have financial support from partners or shareholders, so, like flippers, they focus on buying properties that have the potential to generate more income from rent than the purchase price. These companies may improve the home to increase the amount for which it can be rented, but they usually do not do complete home renovations like flippers.
Purchase and hold groups are usually most interested in multi-family structures and investment properties, and they are in practically any city. Some are small with only a few employees, while the two largest US organizations, Invitation Homes and American Homes 4 Rent, have numerous offices and operate across a wide range of locations.
iBuyers
iBuyer is short for “instant buyer” and refers to a business that utilizes housing market information to make immediate proposals on houses. Sometimes, these are made without seeing the property, while a brief walkthrough is part of the offer process in other cases.
While flippers and purchase and hold businesses may look for properties that need work, iBuyers tend primarily to buy homes in good condition. They plan to purchase a house then immediately resell it. If any fixes are required to prepare it for sale to the public, they usually deduct the expected cost of the necessary repair from their cash offer.
iBuyers are expense-based businesses, so they make cash offers near the house’s market value but deduct a fee(usually around 6%-7% of the price, contingent on the area) to cover the costs associated with the resale. This is a convenience fee for receiving immediate cash for a home as the iBuyer company will likely resell it in a traditional sale where the final buyer relies on financing
At present, iBuyers primarily work in bigger metropolitan areas, so they may not be available for home sellers in more modest urban communities or rural regions. The most popular iBuyers today are Redfin, Zillow, and Opendoor.
Exchange Organizations
These companies do exactly what their name implies. They allow you to exchange your current home for another.
While these are not your typical cash buyers, they offer a similar service that permits you to circumvent the usual financing process. They will purchase another home for you while you still own your current house, holding the latter as collateral until it sells. At that point, the revenue from the sale goes to the exchange organization, and you can take possession of the new home.
In some cases, these groups will allow you to lease the new home until your old one sells. A few of the top house exchange organizations are Knock, Ribbon, and HomeLight.
The Benefits of Selling Your Home for Cash
If you think one of the above buyers might be suitable for your home sale, consider the following benefits of accepting a cash offer on your house in MN:
No Realtor Fees or Commissions
It’s no secret that house selling is expensive. It can feel overwhelming when considering the many fees associated with hiring a realtor, paying for necessary inspections, and covering closing costs. One of the best parts of selling your house for cash benefits is the ability to avoid many of these costs, including realtor fees and commissions.
Because of the simple nature of cash deals, you may not need a realtor to list your home or coordinate showings. This can translate to more money in your pocket at the close of the sale.
You Can Negotiate a Price to Suit You
Generally, if a buyer plans to pay with financing, the lender will appraise the house and determine its value. This then dictates how much credit they are willing to extend to the buyer for the home. Of course, other factors like the buyer’s credit score may also factor into the final approved mortgage amount.
For this reason, most buyers paying with financing are limited as to what they can offer on a home. Cash buyers, however, do not have this same issue and can offer as little or much as they feel is fair. Especially in a competitive housing market, this can work out in the seller’s favor if a cash buyer is highly motivated to purchase their house. Cash offers can exceed the appraised market value of your home if your buyer is willing to pay more.
Cash Home Buyers Offer Fair Cash Deals
Cash buyers know the housing market well and are motivated to offer a fair price to purchase quality homes. In addition, in a cash deal, closing is generally much quicker than when financing is involved, and this means you will receive your funds sooner as well. Whether you plan to apply it to another home or invest it, you have the potential to generate income from interest with your cash so having it in hand quicker is always better than later.
Cash Home Buyers Work to Your Timeline
A purchaser using financing is contingent on the bank’s timelines for closing, while a cash buyer is not. That is why while a traditional closing often takes 30 to 60 days, closing an all-cash deal can take as little as 14 days.
You can worry less during this closing period as well. With a cash offer on your house, you don’t have to worry about the sale falling through at the last minute due to lender problems. This can save a lot of heartache during an already stressful time.
Hassle and Stress-Free Home Selling
Quite possibly, the main advantage of selling your MN house to a cash buyer is that you can sell your house in any condition. While a traditional sale often involves cosmetic improvements to increase visual appeal to potential buyers, those making cash offers are usually not averse to homes with wear and tear or in need of some work.
Another positive aspect of accepting a cash offer on your house is that you will not need to have countless showings and keep your home in pristine condition to be ready for these at a moment’s notice. Often a seller is moving during the sale process, so having the house staged and clean can be difficult.
Finally, cash buyers are often not looking to move into your property or are in no rush to do so. This can be quite helpful in reducing the stress of a move and knowing you must be out of your home by a specific date.
The Bottom Line
All in all, selling your home for cash benefits you in many ways. Rather than focusing on finding a realtor, coordinating showings, worrying if a buyer’s financing will come through, and waiting months to close, a fair cash deal can put money in your pocket quickly and easily.
If you are selling your home in MN, you have enough on your plate without worrying about all the details associated with a traditional home sale. Let Mill City Home Buyers make a fair cash offer on your property and guide you through the sale so you can focus on the important things in life, like enjoying your new home with your family and friends.