Selling your house on the market traditionally can be a monumental task. Not only do you have to worry about your seller’s financing falling through, but you also have to take on the task of showing your home to prospective buyers.
Unfortunately, even if you have a buyer who wishes to buy your house for cash, there is a chance the deal could still fall through. So just how often do cash offers fall through? Continue reading below to learn about why cash offers fall through and a better alternative that can put your mind at ease.
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How often do cash offers fall through?
Despite the common perception that cash offers are a sure thing, there is still a significant risk of the buyer’s cash financing option falling through. Cash buyers may face unexpected financing issues, such as a decline in their investment portfolio, which affects their ability to withdraw funds.
Additionally, many buyers underestimate the time it takes for funds to transfer out from their financial institution, which can lead to delays in closing. To minimize the chance of a failed cash offer, buyers should ensure they have the cash on hand and inquire about the typical wire transfer timeline with their financial institution.
Inspection issues
Another reason why a cash offer could fall through is because of the inspections. Although contingencies are typically reserved for homebuyers who wish to purchase your home with financing, there is still a chance the deal could still fall through even with a cash buyer.
Most cash buyers waive contingency fees so they can close faster and get a better deal. If there are any issues with the house, the cash buyer can negotiate a lower offer to compensate for having to complete those repairs.
It is important to note that although most buyers who use financing come with contingencies, cash buyers too can have their contingencies. Make sure you speak with your buyer and ensure everything is written before you finalize the deal. The last thing you need is for your buyer to be on board in the beginning, and then they decide they need to review the home for contingencies before they finalize their sale.
Unclear titles
Before you can sell the house, you want to make sure that you have a clear title. Even if someone offers you all cash, the buyer will still want to run a title search on the house to ensure you are the only listed owner of the house.
If there are any issues with the title, you will have to get that taken care of, which can further delay the sale. If you aren’t able to remedy the situation within a timely manner, there is a chance that the buyer may move on to another property.
Past due taxes
Tax issues can put a complete stop to the cash sale. For example, even if your buyer has the cash readily on hand and they are in the process of transferring the funds, the real estate transaction can come to a screeching halt if your buyer has tax lawsuits. If the buyer owes child support or back taxes that they haven’t paid, it will show up on their statement of information.
Not enough money for closing
Sometimes home buyers underestimate how much money they need to close on the home sale. In traditional real estate transactions, there are real estate fees in addition to closing costs, but not in cash buying situations.
Since cash sales are typically directly between the homeowner and homebuyer, no realtor fees are involved. This can help the buyer save more, but they must still factor in those closing costs. If they don’t, there is a chance they won’t have enough to close on the sale.
Possible tenant issues
If you are a real estate investor looking to sell a property with tenants, your tenants could hold up the closing. For example, if you agreed to have the tenants out by the time the house closes, yet they don’t leave when the time comes, you could fact contractual issues.
Tenants have legal protections that allow them to stay in the property up until the completion of their lease. If you aren’t thorough with your tenants or your seller, the seller may back out of the offer.
Buyer can’t sell their current home
In certain instances, a homebuyer may want to purchase your home, with the contingency that they must first sell their previous home. Although you can accept the offer, you may be waiting for some time before the homebuyer sells their home. If they aren’t able to sell the house quickly, you will be left waiting for a long time, sometimes months.
What can you do to prevent a cash offer from falling through?
Unfortunately, cash offers still fall through, even if everything seems to go along smoothly. Thankfully, there are ways to avoid or prevent a deal from falling through, such as not taking a cash sale with contingencies.
If the buyer wishes to purchase the house, but they have contingencies that you agree with, make sure you read them over. If the contingency is based on the sale of a previous home, you may want to reconsider the offer if you’re trying to sell the house within a timely manner.
Prepare your house title
If you purchased your home with a relative, friend, or spouse, they also have ownership over it. Before you can sell the home, you will need their permission to do so. If you don’t, you could face severe legal issues from the other parties involved. The sale also won’t go through because the buyer will want the house to have a clean title to ensure they are the sole owners of this new property.
Ensure your home is in good condition
Although it is possible to sell your home even if it isn’t in perfect condition, you may still want to conduct a few repairs before selling the house. If your house has severe repairs needed, your homebuyer will most likely ask for the repair cost to be deducted from the house’s final sale price. If the repairs are too severe, they may walk away from the deal altogether.
To ensure the best results, it is recommended that you do as much maintenance on your house as possible before putting it out on the market. Not everything needs to look completely perfect before you sell the house, but you should make sure the house is well functioning and does not need any severe repairs.
Alternative cash sale option
Did you know that an alternate solution allows you to sell your house quickly without having to worry about a homebuyer’s cash option falling through? These companies are called iBuyers, and they use big data to make all-cash offers to homeowners. These companies have the financial backing needed to offer you a fair price for your home, and they use data from homes that sell near your area and other data to provide you with a fair offer.
How to sell to an iBuyer
If you are interested in selling to an iBuyer, you will need to send them your contact information in addition to information about your house. If your home meets the criteria, they will make you a no-obligation cash offer. Once you accept the offer, you have the ability to choose your closing date.
Avoid having a cash offer fall through
As a homeowner selling their house, you want to make sure you have a solid offer that won’t fall through. Unfortunately, even when purchasing a home with cash, the offer can fall through, especially if the buyer has contingencies attached to their offer.
Now that you know the answer to “how often do cash offers fall through,” it’s time to get a cash offer that won’t fall through on you. If you are ready to find out how much your no-obligation cash offer is, submit your address here.
