Know your options when it comes to quickly selling your home. Here’s how to get the most in today’s hot market
Over the past year, many homebuyers have benefitted from historically low mortgage rates which make it less costly to upgrade to more spacious accommodations, and homeowners have benefitted from higher prices due to increased demand. While these trends have been drawn out for awhile now, HomeLight explains in their Top Agent Insights for Summer/Fall 2021 report that 45.4% of agents report that access to the COVID-19 vaccine is causing new inventory to come onto the market because there are fewer health concerns.
While more existing homeowners are putting their homes on the market, new home construction is constrained for a variety of reasons. 55.5% of agents report that builders are having to increase prices on in-contract buyers due to material cost increases, and 44.8% report that builders are now pricing homes later in the build cycle to account for volatility. That in mind, it’s likely home prices will continue to work in the favor of sellers for the near future.
If/when you put your home on the market, you’ll most likely run into companies that claim to buy homes for cash, often in a matter of weeks. While these may seem tempting, it’s important to consider the information discussed in this article.
As the name implies, cash home buyers are individuals or companies that purchase homes outright at once, rather than going through a lender to secure capital. The advantage of selling to cash buyers is that you can skip showings, home prep, and other steps associated with the sale process.
The main types of cash home buyers include buy-and-hold investors, house flippers, and iBuyers. Buy-and-hold investors and house flippers purchase properties at a discount and then fix them up for renting or selling, however, while the former focuses on renting out the properties, house flippers are focused on reselling the home.
iBuyers are relatively new, however they’ve been surging in popularity due to the convenience they provide. These solutions use automated valuation models (AVMs) to analyze tax records, real estate sale information, and details submitted by homeowners to determine an offer price for properties. While the offers are made quickly, the purchase contracts often include contingencies where reasonable costs of repairs and upkeep are deducted from the sale price after purchase.
While you can save money on prep costs and commissions by selling to a cash home buyer, it’s worth noting that real estate agents don’t pocket the full amount of commissions they collect from each home sale. They have to cover the cost of licenses, database subscriptions, marketing costs for your home, and much more.
Additionally, homes that are sold by realtors frequently fetch tens of thousands of dollars more than homes that are sold without one. If you aren’t in a time crunch and have a bit of time to go through the standard home selling process, this approach may work best for you.