Selling your house for cash quickly in Massachusetts

If you are thinking about selling your house for cash quickly in Massachusetts, you need to understand the potential upsides as well as the many (in my opinion) down sides of selling to an all cash buyer off-market. Let’s quickly get into it:

The Pros

#1 Speed - When you sell to an all cash buyer, the closing period is typically a few weeks to close. An all cash buyer can also typically work with you if you need more or less time to close at your convenience. Compare that to a traditional buyer who takes out a mortgage and you can easily expect to wait 45 to 60 days at a minimum from an accepted offer.

#2 Certainty - With a true all cash, no contingency offer from a buyer you have a very high degree of getting to closing. In fact, there are very few ways a true all cash buyer will be able to get out of a potential offer. Again compare this to a typical buyer who likely is taking out a mortgage to buy your property. If the bank doesn’t approve their loan for any reason or if the appraiser hired by the bank determines the property is worth less than the offer price, the deal could completely fall apart. In my experience about 5-10% of deals fall apart or are impacted in some way as a result of financing. 

#3 As-is - By selling to an all cash buyer with no contingencies, you don’t have to worry about the cost of preparing your home for sale or making updates prior to putting your home on the market. You also don’t have to worry about an inspection contingency, where an inspector comes into your home and finds all kinds of issues and then the buyer renegotiates on price.

#4 Privacy / Convenience - Some people are very private and they have zero interest in having many dozens or in some cases hundreds of people coming into their home. Other people just don’t want to set aside a week or a few weeks of time for showings and open houses. By looking at an off-market sale with a cash buyer you may be looking at only one or a handful of people through your house and no online exposure.

The Cons

Now that I’ve gone into the few pros of selling your house for all cash to a no contingency buyer, it’s critical that I explain the many cons that in my opinion out way this approach for the vast majority of sellers:

#1 Equity loss - Most cash buyers are developers or wholesalers looking for a screaming deal. This means when they put in an all-cash offer on your property, it is likely 5 to 30% below market value. In the markets I work this could result in $50k to $300k in potential home sales value lost - when does it make sense to take this kind of hit by selling to a cash buyer??

#2 Bait & switch - A lot of these supposed all cash buyers are actually pulling a bait and switch. They claim they want to buy your house for an all cash no contingency offer, but the second they have your property under agreement, they bring up a half dozen issues with your property and attempt to renegotiate the price lower and lower and all of a sudden that sweet initial offer is in the rear view mirror and you’re looking at an absolute stinker of an offer.

#3 Wholesaler - One of the largest segments of cash buyers is something called a “wholesaler”. This is someone who will say they want to buy your house cash, but in reality what they really want to do is get you, the seller, locked up in a lengthy contract at a low-ball price. Once they do that they plan to sell the contract to buy your house to some other buyer and they’ll pocket the difference. The risks are numerous, but the two big ones are that they could have you locked into a multiple month contract, never find a buyer of the contract and then you’ve lost all that time and stress for nothing! The other risk is you are now selling your home to some other person who you know nothing about!

#4 Exposure - When you sell off-market to an all cash buyer, you are likely talking to just one person or maybe a handful of supposed cash buyers. But you have to ask yourself, what is the chances that this one person off the street is willing to offer me the highest possible price for my home? Compare that to listing with an expert agent, who will market your home to many thousands of potential buyers. Which approach is more likely to generate more offers and at the best possible price? 100% listing to the general public will result in tons more exposure and higher offer prices.

#5 Hidden fees - A lot of times a cash buyer will remind you that by working with them you’ll get to skip the pricey agent fees involved in an on-market transaction. But they won’t tell you about the hidden fees they might try to add into the transaction - I see this a lot with iBuyer programs where they say there are no agent fees but when you read the fine print you realize there are hidden “service fees” and “attorney fees” and when you add up all the surprises you can end up spending MUCH more than you would have in just hiring a competent agent out of the gate.

#6 Scam Artists - The entire ecosystem of all cash offer programs attracts scam artists and get rich quick people who often do not have your best interests at heart. It can be an unsavory business and while you may be feeling a lot of pressure to get out of your home, you run the risk of more legal trouble, more stress and more headaches if you aren’t careful about who you decide to work with.

If you are looking for ethical advice, from a seasoned, top tier real estate agent in the Greater Boston area, fill out the form below!