These days, just over a quarter of home sales are cash offers. So you’ll likely receive one when you want to sell a home in Michigan. But cash offers for homes may not be as good as they appear.
Granted, you should want to get a cash offer for a home. It can be a quick and convenient home purchase scenario. But many shady businesses know how attractive a cash home buyer is and use this to their advantage.
To avoid raw deals, you need to ask a cash buyer several questions. You can find many examples of questions you should ask below.
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The person who first speaks to you about a home may not be the end buyer. They may be a part of a cash buyer company that acts as a middleman. The goal of this company is to purchase the home and then sell it to another buyer.
This isn’t necessarily a bad thing. Things can go smoothly and all parties can walk away satisfied. But sometimes these deals can go awry.
Talk to the Real Buyer
The end buyer can end up reaching out to you with legal issues, for instance. Perhaps the middleman didn’t disclose an issue to them. Dealing with this situation can cause you a lot of headaches.
Ask the cash buyer who the real end buyer is. If it isn’t them, ask who the end buyer is. Your cash buyer should be fine with giving you some information.
Once you have this information, talk to the end buyer. Clear up any misunderstandings.
Can You Get Proof of Funds?
When you ask for “proof of funds,” you’re asking the cash buyer if they have the funds to buy your house. Even if a buyer wants to immediately sell your home, they should still have the funds to buy your home outright. Inexperienced or shady cash buyers will not have the funds to buy your home.
What Shady Companies Do
The latter type of cash buyer will instead try to get money from an investor. They can do this if you sign a contract that grants them an interest in your property.
You can still get money from this deal, but you may not. A “cash buyer” can end up failing to find an investor for your home. In other situations, it can take an inconvenient amount of time to close the home sale.
Nothing Wrong With Asking
A legitimate fast home buyer should not become offended if you ask for proof of funds. It’s an industry standard to ask. Your cash home buyer should show you a certified bank statement straight away.
If the cash buyer refuses to show their proof of funds, you should back out of the deal.
Can I Have a Deposit?
Getting a small starting deposit is another good idea. This deposit can act as further proof of your cash buyer’s financial abilities. It can also show you how dedicated they are to buying your home.
A Reasonable Amount
Don’t ask for the whole home price upfront. An advance of a few thousand dollars should be enough proof. But make sure you return the money to the cash buyer if the deal falls through.
How Much Will I Earn?
The price the cash buyer offers may not be as good as you think. Yes, you can get the benefits of a quick sale. But they may not be worth settling for a lower price than usual.
Plus, there are a lot of hidden costs that can bring the final offer down much further.
Check Home Value
Even with the added benefits, the offer you get may be too low. But you’re not going to know this unless you learn of your home’s true value. Luckily, it’s easy for you to learn this information.
One thing you can do is check the value of homes similar to yours in your area. You should find plenty of listings on real estate buying sites. Going to an online home value calculator is another option.
A verbal offer isn’t enough. You need to get the offer in writing before you make the deal. This will prevent the cash buyer from backing out at the last moment.
If the buyer has asked for any repairs, subtract that from the final offer. You should also consider state tax, any leftover mortgage payments, and a prorated portion of property tax. If the price doesn’t seem worth it after all these fees, choose a different offer.
Do You Need Repairs or Inspections?
Many cash buyers are happy to buy your home as it is. This often happens when cash buyers are flippers. That is, they want to buy the house, fix it up, and then sell it.
But this doesn’t always happen. A good number of cash buyers will want you to get repairs or have a home inspection.
Too Much to Handle
Asking for repairs or making an offer that depends upon an inspection can mess up a possible deal. Demands from a buyer can quickly add up. You may find that you can’t meet them.
In such a situation, you can lose out on an offer. This can happen after you’ve turned other buyers away. This is why it’s better to get an offer without repair or inspection demands.
Not Always Overwhelming
But the repair and inspection demands may not be as bad as you expect. The point is that you need to ask about these before you make any deals. Then you can consider if the offer is worth it.
For example, say you have a run-down home. If a cash buyer wants an inspection, things probably won’t work out for you. It may be better to go with another offer.
What Will Closing Be Like?
Closing on a house happens when the buyer and seller sign the papers. Often, a lot of things have to happen before this process gets done. Repairs and inspections are just two of the things.
Luckily, a cash buy closing doesn’t take as long as a regular one. This usually happens because a cash buyer doesn’t have to deal with a mortgage.
However, there may still be a lot of surprises waiting for you after you agree to an offer. Make sure you ask the cash home buyer for the following closing details:
If you’re using real estate again or selling to a traditional buyer, you’ll likely run into closing costs, fees, and commissions. You shouldn’t run into such costs with a cash home buyer. But you can still get saddled with them.
Make sure you ask your cash buyer if you’ll be responsible for any closing fees. Good cash buyers should be more than happy to tell you what closing will cost you. Bad cash buyers will likely try to dodge the question.
Experienced cash buyers should give you a clear picture of their closing timeline. After all, they’ve done this for a long time. By discussing your details with your buyer, you will know what to expect and prepare accordingly.
In addition, you should ensure that your cash buyer will work to fit your schedule. This will make your process go by much faster and smoother. However, if they can’t do this, prepare yourself to deal with hassles.
What if I’m Out of State?
It is possible to sell a home in a state you don’t live in. However, it can be a hassle for the buyer and the seller. Because of this, a lot of difficult situations can occur.
Charging a Fee
Some cash buyers will charge you a fee for out-of-state home purchases. This is unfair and you shouldn’t have to put up with it. If a buyer does this to you, you should go with another offer, if possible.
An ideal cash buyer should have the ability to work with you from a distance. If the cash buyer is working with a company, check their locations. The company may have a location that’s close to you.
If this is the case, try to talk to people at that location. Working with people face-to-face can make the process smoother.
Cash Offers for Homes in Michigan
As long as you’re careful, a cash offer for a home can be everything you could ask for. You can sell your home quickly and with little extra hassle. A cash offer is perhaps the best way to sell a home in Michigan.
Do you need to sell a home in Michigan? If so, consider contacting us at Cash for Michigan Houses. We give cash offers for homes that are in any condition.
Get a cash offer today by filling out the form at the top of this page.