Five Ways to Save Money When Selling to a Cash Buyer

Everyone loves to save money, and with a home being one of the highest priced items we own, it also offers some of the best opportunities for savings when you sell.  With that in mind, here are five of the top ways you can save, and some rough estimates of how much you might save, if you choose to sell to a cash buyer rather than list your home with a realtor:

(1)    Save on commissions.  Realtors in the Greater Cleveland area area will charge between 5-6% of the sales price of your home as a commission.  That money comes out of the purchase price you would otherwise receive from a buyer.  On top of that, you will note that in most purchase agreements your listing agent will include an additional fee, typically between $250-$350 for “brokerage services rendered” (or similar language).  It is not clear why there should be a fee in addition to the commission, but nevertheless, you will find it in many purchase agreements.

This means that you will lose $5,000.00 - $6,000.00 for every $100,000.00 that the buyer pays for your home, plus the additional $250.00-$350.00.  For a $150,000.00 home, you would have to give up between $7,750.00 - $9,350.00 of your sale price to the realtors.

When you sell to a cash buyer, you will not pay any of the above, saving you thousands of dollars. 

(2)    Save on City Requirements.  In many of the cities where we purchase homes, the cities require sellers to obtain what is called a “point-of-sale inspection” (“POS”) before they can sell.  The POS involves a city inspector coming into the home (or in some cities, just an inspection of the exterior) and creating a list of both interior and exterior repairs which must be completed in connection with the sale.  Buyers are allowed to assume these repairs, but in many sales the listing agents will pressure the seller to fix some or all of these items to attract more buyers.  When the seller fails to make the point-of-sale repairs, this can lead to a property sitting on the market for an excessive period as otherwise interested buyers hesitate at being asked to assume what often amounts to thousands of dollars of City required repairs. 

When you sell to a cash buyer like us, we will always assume the city point-of-sale required repairs, so that you don’t have to spend any money on those items or time dealing with contractors.  In a recent deal we completed in Twinsburg, for example, the city had over $7,000.00 in required exterior repairs, including a deck and concrete work.  We assumed it all, saving the seller thousands of dollars and a lot of headaches dealing with contractors.    

(3)    Save on Other Repairs.  The city POS won’t cover every repair item a home might need to be ready for sale.  Most buyers you deal with will not only have their own standards of repair that they want to see but more importantly, they will also have a lender that will have specific requirements that must be met.  We have seen deals fall apart when a buyer’s lender wanted, for example, a roof repair or mold remediation or replacement of a faulty furnace. 

Cash buyers like us take on all of those types of repairs and purchase with cash or private investors so no conventional or FHA loans are involved in the transaction.  When no typical lenders are involved in your sale, there are no repair requirements that a seller has to worry about when they sell their home. 

(4)    Save on Clean Up and Moving Expenses.  When you list your home with a realtor, there will be an expectation that the home will be kept very clean and organized for showings.  In many instances, there will also be pressure to move, rearrange or remove personal items.  Realtors may also want to stage the home, which can involve an even greater burden on a seller in terms of reorganizing the home and personal belongings.  For someone who does not currently live at the home they are selling (for example, when selling the home of a relative) there can also often be many personal belongings left in the home that need to be moved. 

We regularly purchase homes with unwanted personal belongings left behind, saving the seller from needing to lose time and incur costs related to moving items out of the home.  This can be everything from large pieces of old furniture to large amounts of trash, clothes, books and old appliances.  The bottom line is, when you sell your home to a cash buyer, they can eliminate your costs related to moving things you do not want to move. 

(5)    Save on Escrow Fees.  When you sell a home in Cuyahoga County or Summit County, you will see in any typical purchase agreement that the seller must pay for a title exam, one-half of the cost of the title insurance policy, and one-half of the escrow fee. 

While not all cash buyers do this, when we buy a home we always take on all of the above-mentioned expenses, so our sellers do not pay for the title exam, do not pay for any of the title insurance policy, nor do they pay any of the escrow fees.

As you can see, there are lots of ways you can save money by selling to a cash buyer.  If you have any interest in discussing the sale of your home or commercial property, please give us a call at 216-694-8246 or use the Contact Us link above to send us an email.