Should you take a cash offer for your Phoenix house? Not always.
That answer may surprise you coming from investors! Sure, we buy houses in Phoenix and will tell you how to sell any property for cash – AND when you shouldn’t say no. That’s our business. And of course, we are always looking for sellers who are a good fit.
BUT, we will also tell you some reasons you might consider refusing a cash offer because we are only interested in the win-win.
Selling Your House For Cash In Phoenix
If you’re selling a property in Phoenix to an end buyer (the person living in the home), chances are good it won’t be bought with cash. Most transactions close with a bank loan because most buyers simply don’t have the liquidity to write a check for a house. This isn’t news. What may be news is that there ARE buyers, typically investors, who can purchase your house in a cash transaction. So when is this not a good deal? Normally there are really only a couple of reasons why a homeowner who’s considering a cash sale wouldn’t explore this option.
We will assume that at this point, the owner is either tired of the property and its headaches or is experiencing a financial difficulty and has few borrowing options. SO-Understand that an investor is looking to purchase a property at an after repair value (ARV) discount. Typically, an investor would want to purchase a property at 70-75% the ARV (will vary by market, but as a general rule of thumb) less the estimated cost of repairs. Why? Because buying houses you’ve never lived in involves risks. And sometimes investors lose a considerable amount of their money while alleviating the seller’s problems. What an investor can’t be sure of is accurately ”
And sometimes investors lose a considerable amount of their money while alleviating the seller’s problems. What an investor can’t be sure of is accurately “guess-timating” (yes, sometimes there’s guessing involved) the cost of repairs as some are hidden, even to the homeowner, and some just aren’t disclosed. Some properties have liens that need to be paid and labor and materials costs fluctuate, especially in a strong market like Phoenix’s.
Do your homework. If your house is updated (pricey) and in good condition, listing it may be your best option. Banks are more likely to finance an updated house and it’s more likely to appraise much higher, so the bank’s risk is lessened. One of the largest expenses for an investor is updating kitchens and bathrooms and moving walls, even if the home is in good condition. So when they’re not… It means investors take risks where banks won’t finance a buyer. Also, if you’ve got the option of renting your property and it generates cash flow sufficient enough to pay a property management company 10% of rent (land lording is hard!) AND still allows you to put funds aside for unexpected repairs, this may be worth exploring. Lastly, if an investor isn’t local you are less likely to receive your highest cash offer.
All real estate is local. Remember, an investor has to try to limit his or her exposure to risks and still try to earn a living by improving a property to where it’s retail ready. And sometimes this is done sight unseen (scary stuff). For that reason, remote investors must account for surprises, for the expense of travel to that market, and certainly sharing proceeds with a local partner who will handle the lion’s share of the improvements and securing a buyer or agent. All those expenses would be deducted from what you could reasonably expect to be offered. With that being said, there are certainly reasons to close transactions fast and that usually means with cash. It’s easy to let a bank share the risk, even if you have the money – but most sellers don’t have the luxury of that type of time. At Property Cartwheel we don’t spread ourselves too thin so we can make quick home offers and meet our primary goal of creating a win-win solution. Fast.
The Benefits Of An All Cash Sale Of Your House
The benefits of a cash sale are:
- Have cash in hand and your loan balance (if any) paid off very quickly
- Be done with the headache of land lording or collections
- Pay no closing costs to sell
- Save your credit and avoid foreclosure
- Save time and effort
You don’t have to deal with the hassles of waiting months for a buyer to get a mortgage, only to be told that the lender eliminated the program and you’re back to square one.
You don’t have to list your house with a real estate agent & pay 6% of your sale price in commissions.
You don’t have to deal with a parade of people in your home just “kicking the tires” and checking out your property for fun. We don’t waste your time. This is our business.
You don’t need to paint, make repairs, or even clean up. We take properties just as they are. You won’t waste money on junk haulers or contractors or cleaning crews.
You don’t need to deal with any paperwork. We have it all covered. And we’re transparent.
Working With A Reputable Phoenix House Buyer / Investor
Always make sure that your cash buyer is reputable. Have they done business in your community? Can they show proof of funds before asking you to sign a contract? Are they local? Property Cartwheel is Phoenix-based. And we offer real references from past sellers and even some non-sellers we’ve helped because it was the right thing to do. We can even show you examples of some of our latest projects and we’ll be happy to answer any questions you have so you’ll feel comfortable. We pride ourselves on being a part of the Phoenix community. Our mission is to help local Phoenix AZ homeowners. If you need to sell your Phoenix house fast and at a fair price, contact us. We help improve and beautify neighborhoods one house at a time while taking care of the guesswork on your end. If you’re wondering about selling your house for cash in Phoenix or valley-wide, we can help you.