No two houses are the same. When it comes to buying or selling one, the same is true for real estate closings. The process is a complex one that both buyers and sellers find difficulty with.
You can take a sigh of relief if you’re considering taking cash for a home. The cash closing process simplifies the entire ordeal a little bit.
In the world of real estate, sellers appreciate and prefer cash buyers. That’s because a buyer’s mortgage deal with a lender can fall through right before closing. When a buyer drops cash, it makes the process quick and simple.
Not to mention, closing with cash saves money—30 years worth of mortgage interest.
If you’re trying to sell a home and get cash for it, you want to read this. Discover here some important tips you need to know about the cash closing process.
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How a Cash Offer Gets Made on a House
You’ve likely seen commercials and signs all over stating we buy houses with cash. Most of these are investors looking to buy multiple properties in a certain location.
That’s one way cash offers get made on homes. The other way is by traditional contact from a prospective buyer.
If a buyer has an interest in a home they either contact the seller directly or the seller’s agent. When an agent represents a buyer, the buyer makes the agent aware they’re paying with cash.
The buyer’s agent then negotiates the all-cash offer deal with the seller for them.
What’s an All-Cash Offer/Deal?
The phrase all-cash doesn’t mean a buyer shows up to a closing with a suitcase or bag full of money. That’s illegal in the United States. Just ask the IRS.
The money you’re using as cash for a home must have a paper trail. That’s means you’ve already paid some taxes on it. So don’t get confused by the verbiage.
In essence, all-cash means purchasing a house with traditional financing. You don’t have to rely on a loan from a lender to get the home. The funds come from a verifiable source—bank account—and get transferred via an electronic wire.
You can also use a cashier’s check.
Cash Closing Process
Closing on a home with cash happens like a usual closing but without a lot of conventional paperwork.
The buyer’s still required to sign the purchase and sale agreement for the home. This is the contract the protects both the buyer and seller in the sale process.
The seller needs to make sure the buyer has the funds they claim. This is why it might be beneficial to hire an agent if you’re selling or buying for the first time. There’s an exchange of personal information—bank and other income statements.
You want those types of documents handled by a professional. An agent can also see to it that the sale is contingent upon the home passing inspection.
The actual closing happens at a table hosted by a local title company. A title closer lays all the final closing documents down between the seller and buyer, then closes the deal.
Consider a Cash Closing
The cash closing process takes the monotony out of the conventional closing method.
When you’re ready to sell your home, don’t shy away from cash buyers. In the end, you’ll sell faster and save time and money.
Want more home tips like this? Check out our home guide and find out everything from finances to cleaning.