Sometimes life throws curveballs that require you to sell your house fast—and we’re talking days, not weeks or months. You simply don’t have the time or money to spare on the traditional real estate market. But you are worried that you are going to get the raw end of the deal with a cash offer.
In this article, we are going to outline how to calculate if a cash offer is a good deal for you.
Are “We Buy Houses Fast” a Rip Off?
It’s no secret that companies that buy houses for cash purchase them at a below-market rate. But that does not mean they are ripping you off. And no, I am not going to give you a “well, they have to make money” excuse. While that is true, that doesn’t really matter to you, does it? Nor am I going to say, “That’s the price you pay to sell your house fast.”
There are actual financial benefits when selling your house at a discounted rate, not to mention time benefits. You need to factor all the costs involved with selling a home on the traditional market. Let’s quickly review the biggest benefits of selling your house for cash:
- Selling your house as-is saves you on repair costs to get your property up to snuff for a traditional sale. If you don’t make the repairs, it will likely sell for less than market value, even on the conventional real estate market.
- Every day your house sits on the market costs you money. Let’s say your mortgage is $1,500 per month. The average number of Days on Market (DOM) in Florida is 90 days. That translates to $4,500 in mortgage payments while you wait for an offer and escrow to close. If you sell your house in 7 days to a cash buyer, you save $4,150.
- You save on time. We already showed how time is money in the previous bullet point, but time is also valuable in itself. Companies that buy houses for cash usually complete the transaction in five to seven days. That’s 84 days faster than the average DOM in Florida. That’s 84 days you can dedicate to something else.
- You save on real estate agent commissions. The standard commission for real estate agents is 6%. If an agent sells your house for $200,000, their cut is $12,000. Companies that buy houses for cash remove that middle man.
What is a Fair Cash Offer to Sell My House Now?
Okay, now the big question. What is a fair cash offer to sell your house fast? Grab your calculators because it’s time to do some math.
Cash Offer Price + Estimated Repair Costs + Mortgage Savings + Real Estate Commissions = Value of Cash Offer
Let’s run through an example. Let’s say the market value of your home is $200,000, your mortgage is $1,300, and let’s assume a modest estimated repair cost of $5,000 to get it “market-ready.” You receive a cash offer for $170,000. An offer that is $30,000 under market value sounds like a rip-off, right? Well, let’s see if it is:
$170,000 + $5,000 + $3,900 + $12,000 = $190,000 value
That’s only $10,000 less than market value. Keep in mind that you might not even get market value for your home on the traditional market. So, is this cash offer a good deal? Well, to answer that you will need one more equation:
Market Value – Cash Offer Value = Time Value
$200,000 – $190,000 = $10,000
In our example, is $10,000 worth saving 3 months on the traditional market? Is selling faster worth the time value to you? Only you can answer that question.
How to Sell Your House in 5 Days
If you want to calculate the numbers for yourself, contact the local companies that buy houses and ask for a free quote. Here at Tropic Coast Homes, we buy houses in Florida in any condition and all price ranges. Complete our online form or Contact Us for a free offer.
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