Selling your house usually involves some level of stress.
If you have a hard deadline approaching where you need to do it quickly, you are probably already stressed.
One of the benefits of homeownership is the ability to build up equity as you make your payments. There may come a time though when you have a life situation (good or bad) that requires cash.
Sometimes, that equity in your house is your only option. You may be able to get some of it through a second mortgage. But to get the max amount you will need to sell the property.
I wrote this guide so you can get an idea of some options to getting your house to the closing table fast, and the pros and cons of each.
Not So Fast…
When you sell your home very quickly, you will be selling under market value.
Could you find a buyer to close in 7 days and pay full market value and a quick closing with no contingencies?
Highly unlikely. Especially if you do not have time/desire to prepare your home to list on the market.
Maybe in a very strong seller’s market (market with more buyers than sellers = favors sellers) and even then you would have to get lucky.
Think it Through
So before you go about finding a quick closing, make absolutely sure it is necessary.
There are of course many reasons you might need to close fast. You could be behind on your mortgage, you could need the money to use on another time sensitive opportunity or get out of a time sensitive financial problem.
Just remember, buyers that close fast with no contingencies will want a fair price for offering convenience.
This can be a win-win. But if you want to close fast simply out of impatience, it might be a better idea to think about putting the home on the market.
Your House’s Condition
Another to consider is the condition of your home. Be honest with yourself here. Have you been spending money on maintaining it over the last 5 years? 10 years?
Does it have issues that the new buyer will need to address before re-selling/renting?
Or maybe your home is in very good condition, but you still need to get to closing quickly.
This will affect what kind of buyer you will want to look for. Some welcome poor condition (mostly investors), while others stay away (usually buyers looking for their primary home).
Contract Terms & Contingencies
You want to sell your house fast. But a contract contingency can make it go from selling fast to starting back at square 1.
So aside from price and a settlement date that works, make sure you know that the buyer will close. For example if the contract has closing in 14 days, but have a 7 day inspection contingency, they could get out of the contract on the 7th day.
This would defeat the whole purpose of selling fast, so make sure you know any “outs” your buyer has, and the timeframes they can use them.
Sometimes, contingencies are unavoidable. But you want to know timing up front.
Options To Find Buyers Fast
Here are some potential sources of buyers who can close quickly on your home.
For your particular situation and your particular house, some may be better options than others.
“We Buy Houses….Any Condition” Investors
You may have seen these investors advertise on signs around your community, busses, radio, etc.
There offer is they will buy a home no matter what it looks like or what the situation is, as long as the price is right.
Usually they have cash and close as fast as title work is done…which can be anywhere from a few days to a week or so.
• Serious investors.
• Will close fast.
• Offer little or no contingencies.
• Will seek a (sometimes very) low price in exchange for speed and certainty.
You have limited options, must close and are willing to sacrifice money in exchange for time.
Not every investor relies on a getting a property at a huge discount.
With that said, the deal has to make sense for all parties. But there are investors who are willing to come up with a discounted, but fair, price for a property.
These investors may be buying and holding houses or flipping houses, but usually do not acquire as many properties.
The best way to find them quickly is to ask an agent who specializes in investments.
• Some investors offer more than the “cash for homes any condition” type.
• May still give you favorable terms with a fast closing.
• Hard to find them on your own.
• Have to find one that is a match for your house’s location/condition.
You have a little bit of time to find someone. Also a good option if you are willing to talk to an agent about your sale, as they could know a local investor looking for a property.
Listing On The Market
This is the traditional selling method. This method is the most likely to net you the most money from selling. You will go on the market and expose your home to a huge group of potential investors/owners.
Usually, you will be showing the home extensively before taking offers.
Here is a guide that is focused on listing the home for sale on the market.
• Most times this will net you the most money.
• Can still be marketed for a quick sale.
• Takes more time to get ready.
• Showing the property to lots of buyers.
If you can plan ahead a bit, are willing to show your house and have many people tour it and work with an agent, this is a good way to net more than a sale to just 1 investor.
iBuyers are generally well funded companies that buy your house fast with the intention to sell it soon after.
Many do not even come see your home until after they give you an offer, rather relying on videos and photos from you.
These companies are solid financially and are usually considered a cash buyer.
Most, however, do a home inspection after the contract process and will ask for a reduction in price for repairs needed as well as charge a service fee.
• They pay well. On average, more than traditional real estate investors.
• Work with a large company with an organized system for the process.
• May turn you down if your house needs lots of work or is cluttered.
• Will reduce your offer if inspection turns up repairs.
You want to sell a house that is in good condition, but need to do it faster than being on the market. Keep some flexibility with the initial offer price since they have clauses to lower them after inspection.
Selling to a Builder or Developer
As a new home expert, I have connected several homeowners to a builder to sell to.
If you look out of the window of your old house, and see some newer homes on your street, this could be a great option.
Builders looking to do either a speculative build or have a buyer in mind for the area make solid offers on properties, many times in cash.
However, keep an eye out for study periods. Sometimes if a builder wants some time to research your land for a project, they will put in a contingency to make sure they can build what they want.
• They buy for land, so don’t worry about property condition.
• Can give you a good price and good terms, in the right market.
• They are not interested in all areas.
• May have a study period where they can back out if your lot does not suit their project.
If you are in a neighborhood/area sought after for new homes and communities, this is a great option.
On average I have seen them pay more than a home flipper and may even give you a free rent back to stay in the property after closing for awhile as they begin the permitting process.
Talking to an Agent
There are a lot of real estate agents. Some of them will have experience with investment grade properties, teardowns and selling quickly.
Some will not. If you can find an agent with experience this can save you tons of time, headache and potentially net you more money.
Real estate agents like myself will have a network of builders, investors, iBuyers and the ability to market the home on the open market if needed.
• Will be able to show you multiple options.
• Have experience going through the process.
• Can represent you going to the market, or bring you a buyer if you want to represent yourself (depending on your state’s representation laws).
• Some may not have experience with your situation.
If you can find an agent who specializes in your area and in your type of property/situation, this is a great method to try.
An agent should be able to show you the breakdown of estimated costs/profit of all your options.
How Fast Can I Sell?
How fast can you go from thinking of selling your house to cash in your bank?
It will depend on the contract that you sign with the buyer. But, there also be some other variables that can delay closing to be aware of.
The best offers for a fast closing will have no contingencies.
A contingency essentially says “I will buy your home…unless”.
Contingencies include financing (buyer can walk away if they do not get financing), inspections (they can walk away during inspection period), appraisal (walk away if home is appraised for less than contract price), and others.
Sometimes it might just be a 7 day window for the buyer to void the contract for any reason.
Keep an eye out in your contract for any of these contingencies.
Read in the contract about the ability to assign the purchase to another party.
Also known as “wholesaling” or “contract flipping”, these buyers will get your home under contract at, say, $400,000, then assign the contract for a fee of $20,000 that they will pocket.
Wholesaling has been under scrutiny over the years, some think it is a shady practice while others defend it as just business as usual.
If you are ok with it, fine, but be aware because some contracts say if the buyer cannot assign the contract they can get out before closing.
This one is unavoidable. A lawyer or title company will need to do a title search to see what liens are on the property.
Once this is done, you can close. I have seen it take anywhere from a couple of days to a couple of weeks or longer depending on how busy the lawyers are.
If the title search finds some things they need to clear up you will need to work with them to make sure the buyer has clear title.
When Will You Get Your Money?
You probably need to sell fast because you need your equity to do something else.
So how fast will the money show up in your account? Other states may be different, but here in Virginia it will be wired or a check cut after they record the new deed at the courthouse.
On average, 24-48 business hours after closing you will see the funds pending in your account. Again, this could vary in your area.
Other states you may get a check right at the closing table, or may need to wait longer.
When Do I Need to Be Out of the House?
Most contracts stipulate that you need to be moved out of your house the day of closing.
But this can be modified with what is called a “rent-back”. You can close on your home, get your funds and then stay in the property after that for an agreed upon period of time.
You may pay the buyer a daily rental rate for staying in the home. But often, as part of the contract you can get a free rent back period if you are willing to negotiate elsewhere.
This will give you time to pack, move and use your funds to get help with those tasks.
Sometimes, the speed of the closing on your home will be more important than getting absolute top dollar.
Builders and investors understand this, and specialize in buying properties quickly. A good real estate agent can help you meet these buyers.
Have a question? Feel free to reach out to me.
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