How to find cash buyers: 5 popular options in 2022 (2023)

Last updated 14 December 2021

We've all heard the saying that cash is king.

For real estate investors, it is sometimes more desirable for a buyer to be willing and able to pay for a home or investment property in cash rather than waiting for a buyer's loan to be approved. Sometimes a home can be difficult to value, in need of repairs, or a seller just wants or needs to sell quickly and for cash.

While every seller has a different reason for selling for cash, the process is always the same. In this article, we'll explain how and where to find cash buyers, and some of the biggest benefits of selling a home for cash.

Key learning points

  • Cash buyers buy real estate outright without the need for financing.
  • Offers from cash buyers are generally stronger because no loan approval is required.
  • Common and convenient ways to find cash buyers include iBuyer websites, investor-friendly brokers, and Roofstock Marketplace.
  • Cash deals can close quickly and with fewer contingencies than with a buyer who must finance.
  • A seller must verify that the buyer has the money to close by asking for proof of the money, and must be wary of cash buyers who promise a high price and then ask for numerous repairs.

What is a cash buyer?

A cash buyer is a person or entity (such as an LLC formed by a group of real estate investors) who has money available to buy a home outright without financing. When closing the escrow, funds are transferred from the buyer electronically to the seller's bank account or payment is made in guaranteed funds, such as a check.

Cash offers are generally considered stronger offers because there is no financing condition in the purchase contract.

A contingency is a clause that allows a buyer to back out of the transaction and usually get their money back. Common contract terms include an inspection of the buyer's property, an appraisal and a financing period that makes the deal contingent or conditional on the buyer getting a loan.

Unfortunately, home sales sometimes fail unexpectedly at the last minute, and the reason for this is often due to financing issues.

According toZillowOne of the most common reasons for a transaction to go unsecured is that the buyer's financing fails. Even if a buyer is pre-approved, a change in employment, new debt or a new negative credit problem can give the lender a reason to deny financing to the buyer.

All cash offers often come from two types of buyers:

  1. Owner-occupiers who can afford to pay cash for a new primary home, perhaps because they have significant equity from their previous home.
  2. Property investors - including outright buyers or iBuyers - who buy homes to convert to wholesale or to add to sales or rental portfolios.

How to find cash buyers: 5 popular options in 2022 (1)

Where to find cash buyers

The median sales price for homes sold in the US is $374,900 (as of Q2 2021), according toFederal Reserve. While it may seem surprising that there are buyers out there with so much cash on hand, the fact is that cash buyers are easy to find if you know where to look.

Here are five ways to find cash buyers for real estate today:

1. Rooftop marketplace

Roof platehas completed more than $3 billion in single-family rental transactions in less than six years, and listing a home for cash on the Roofstock Marketplace can make good business sense.

Investment property owners can sell their home to a global network of investors through Roofstock, without having to deal with showings or upsetting a tenant. Once you've submitted information about the property and uploaded some great photos, start the ad and set "Cash Offer Only" as your ad criteria.

Offers are received and negotiated entirely online. Once a bid is accepted, the Roofstock team coordinates the entire closing process. Cash transactions can usually be completed within a period of 30 days after the purchase and sale agreement is signed.

You can also see if your property qualifies for a cash offer viaRoof cover offer here.

2. iBuyers

An iBuyer is a real estate investment company that makes cash offers on homes, often sight unseen, using an automated valuation model (AVM) with multiple data points, such as comparable sales and neighborhood assessments.

In addition to closing quickly on all cash, marketing to an iBuyer can give a property owner more control over the sales process.

Once an offer is accepted, the property is typically inspected and the offer is updated based on the results. Sellers have the option to accept a revised offer, renegotiate, or return to the market.

3. Investor-friendly brokers

Real estate agents who work with investorsoften have a hot list of buyers who are willing, ready and able to pay cash for a home. In addition to access to the MLS, investor-friendly brokers work with clients who overlook cosmetic issues such as worn carpets and a home in need of repair.

However, real estate agents who work with cash buyers can be hard to find. Some of the best places to find a broker for investors include searching forZillowIMakelaar.comby using keywords like "rental" or "investor" or by contacting a local property management company and asking for a referral.

4. Public records and auctions

The majority of real estate sales are public records that a seller can access online. Go to the local County Recorder's Office or County Clerk's Office and check for recent title changesdo not have a mortgage. Contact the buyer to see if he or she is interested in buying another home for cash.

Real estate auctions are filled with potential cash buyers who are willing to act quickly if the deal is right. Plan to arrive early at the auction, hand out business cards and meet potential buyers. The good thing about auction networks is that you don't have to pay high auction fees if a cash buyer is willing to work directly with a seller.

5. Property and bandit boards

Placing a "For Sale" sign in the front yard is a proven way to find buyers for a home. Adding a sign that says "Cash Discount" along with some contact information, including a phone and website link, can generate leads from cash buyers and motivated buyers from real estate agents.

Draw banditsare small ads along freeway exits and major intersections used to attract cash-strapped home buyers. Drive through town and look for brightly colored signs that say "I pay cash for houses" or "I buy houses". Then call the phone number on the board to see if the cash buyer is interested in a trade.

Advantages of selling a home for cash

There are several advantages to selling a home for cash, but also some potential disadvantages:

Benefits for cash buyers

  • Closing can happen quickly, sometimes in less than two weeks, compared to waiting 30, 60 or even 90 days for a home buyer loan to be approved.
  • Less stress and hassle because you don't have to deal with showings, stage an empty house, or not know if the deal will fall through due to a financing issue.
  • Cash buyersare often willing to buy a home "as is, where is", where the buyer agrees to buy the property for cash in the condition it was in when the purchase and sale agreement was signed.
  • Potential for reduced costs if no repairs are performed upfront, no buyer concessions such as post-inspection repairs, and a lower or zero sales commission if only one or no broker is involved.

Disadvantages for cash buyers

  • The listing price may be below market when you sell to a cash buyer, but money is often saved due to no repairs, savings on real estate commissions, and the security closes quickly.
  • Cash buyers may not have actual cash on hand. That's why sellers ask for proof of the money, such as a bank statement in the buyer's name.
  • Some cash buyers may try to bait and switch by making a good offer and then asking for countless expensive repairs once the house is under contract.

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Closing timeline when selling house for cash

One of the biggest potential benefits of selling a home for cash — beyond a cash deal — is that closing can happen quickly compared to a buyer financing the purchase.

When a home is sold for cash, closing can happen in as little as two weeks, sometimes even less. Once the purchase and sale agreement is signed, the escrow company orders a property report, makes sure any liens are taken care of, and prepares the closing documents for signature.

On the other hand, selling to a buyer who needs financing can sometimes drag on. While it is possible to close in 30 days if a lender is involved, it can often take anywhere from 45 to 60 days to close escrow when a buyer applies for a mortgage.

There are generally five quick steps to follow when closing on a home that has been sold for cash:

  1. Execute the purchase and sale agreement.
  2. Check proof of funds to ensure the buyer is able to pay the purchase price.
  3. Set up an escrow account with a real estate company to deposit the buyer's funds, order the property report and ensure that any existing liens are paid as a condition of closing.
  4. Arrange a home inspection and assessment if desired by the buyer.
  5. Review and execute the closing documents, after which the proceeds will be transferred to the seller's bank account or paid by check.

Final thoughts

Although home prices are rising, finding cash buyers may be easier than many sellers think. From traditional foreclosure boards to iBuyers and Roofstock Marketplace, selling a home for cash can be a great path for owners who want to close quickly and without the traditional hassle of dealing with a buyer waiting for a loan to be approved.

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