Understanding Cash Only Real Estate
Real estate is a great investment opportunity, but there are many ways to purchase property. One popular choice for investors is cash only real estate. If you would like to know more about cash only sales, keep reading.
What Is a Cash Only Sale?
When buying a home, many people take out a mortgage to pay off the house over the course of several years. The benefit: it allows the average person, couple, and family the ability to purchase a home without going broke or having to save up for several years. The downside: you have a monthly interest rate. Therefore, you ultimately spend more than the purchase price to repay the loan.
Some sellers only accept or will consider cash sales. In this scenario, the buyer would need to have enough cash reserves to fully purchase the home without a loan. This method is common for homes that may be hard to sell, or homes that need to be sold fast.
What Are the Benefits of Cash Only Sales?
When selling a house, there are a lot of hoops to jump through, and many involve the buyer's home loan. The lender wants to ensure the buyer can pay the mortgage, and the property is worth the claimed value, which means the property will need to be inspected. If it doesn't pass, the insurance carrier may deny a loan or request repairs before approving the loan.
Other benefits of cash only sales include:
- Provides instant equity in the home
- Saves money on fees like credit checks and loan fees
- Speeds process
- Avoids the need for staging and showings
What Types of Homes Benefit from Cash Only?
Because the process is usually fast, cash only sales are great for homes at risk of foreclosure, preventing the seller from having their credit adversely impacted. In addition, since there is no need for an inspection, cash only sales are commonly used for homes that need major repairs like structural issues. It may be hard to find a lender who'll provide a loan on a home that needs extensive repairs.
For buyers, cash only sales are a great way to quickly reinvest money into new property. This allows you to continue reaping the benefits of owning property. Similarly, cash only sales are great for houses that would benefit from flipping because there is no inspection and there are fewer costs/fees. Therefore, you'll be able to maximize profit.
Cash only real estate is a great option to consider, especially for hard-to-sell property. If you would like to know more, it may be time to start working with a real estate agent in your area. To learn more, contact a company such as House Hunters of Dallas today.