Fifty-seven days. That’s the amount of time it took for the average purchase mortgage to close as of Jan. 2021, according to data from Ellie Mae — an increase of nine days over the year prior.
Whether you’re an investor hoping to move nimbly between deals or someone who needs to unload a property quickly to avoid financial strain, this estimated two-month closing timeline could prove problematic. Keep in mind, you’ll also have to factor in time for prepping, staging, and marketing the home to attract an offer.
So, what about the alternative? According to the National Association of Realtors, cash sales made up 19% of transactions in Dec. 2020, or about one in five sales. Some markets may be more cash-heavy than others, but every market has real estate cash buyers looking for their next investment. The key is knowing where to find them.
When speed is your top priority, this is how experienced investors recommend narrowing your buyer search to those with liquid money in the bank.
1. Ask an investor-savvy real estate agent for leads
Even if you’re looking to avoid a conventional listing process, a well-connected real estate agent can be an invaluable asset. Many agents are active in their local investor community and have an inside track to finding cash buyers.
Some may be on a first-name basis with house flippers and rental property owners in the area who count on the agent to flag them as deals become available. They’ll also be familiar with an investor’s buy-box — which refers to their parameters around the condition, price point, and location of homes they prefer to buy — and whether your property fits the bill.
“Every Realtor® knows at least one investor,” says Nick Ron, CEO of House Buyers of America. “The movers and shakers who have a strong network will know several, so it’s important to work through them.”
Greg Kurzner, CEO of an Atlanta house buying company, points out that real estate agents have access to industry tools like PropStream, which helps investors find properties to purchase in their area.
Agents can also scan tax records to find LLCs that own properties nearby, which can signal an investor-owned home. “If the same LLC owns multiple houses nearby, they might likely be a good prospect for the seller’s home,” says Kurzner.
Not sure where to find an agent who could provide this service? At HomeLight, you can tap into a vast network of investor-friendly real estate agents in your area. Just enter your address, answer a few questions, and we’ll connect you two or three agents whose resumes align with your selling needs.
2. Check public records for cash sales
All property sales are logged as public records that anyone can access. Ron suggests looking up any properties that have been bought or sold within a year. “The ones that were bought low and sold high were most likely flip transactions, so you can contact the owner and see if they might be interested in purchasing your property,” he says.
3. Attend property auctions
When a homeowner stops paying their mortgage payments, the property could eventually go into foreclosure and end up being auctioned off, either in person or online. The buyers who attend these auctions all have cash to spend on foreclosed or distressed properties. Showing up at the county courthouse on auction day is one way to network with cash buyers and market your property. Here’s your quick plan of attack:
- Find out when future auctions are scheduled and choose which ones to attend.
- Come prepared with a pitch of the property you’re trying to sell.
- Introduce yourself to potential buyers, share your contact information, and request theirs.
- Follow up with an email restating your interest in working with them on investment deals.
4. Join some real estate clubs
While in-person meetings may be hard to find in COVID times, real estate investment clubs can be a good place to meet cash buyers. These can range from small, privately run groups to nationally accredited REIAs (real estate investment associations). REIClub lists the details for real estate clubs around the country.
Be sure to do your due diligence before joining, as some clubs may have membership fees or ulterior motives, such as trying to get members to crowdfund real estate investments. As Kurzner puts it: “Meetups and local REI clubs are a potential source, but there are a lot of minnows and a few sharks.”
5. Connect with landlords on Craigslist
It’s not just for online dating and used furniture — the classified ads website is also frequented by real estate investors hunting for their next fixer-upper. Because the site is free, not all of the listings will be legitimate or worthwhile, so peruse with caution and sign nothing until you have done due diligence.
When using Craigslist as an investor search tool, try these quick tips:
- Post advertisements for the listing you’re trying to sell. Keep it short and sweet, focusing on the benefits the property can bring to the buyer and then including a call to action, whether that’s following a link to the listing, visiting a social media page, or sending you an email.
- Search for qualified buyers. Find cash buyers, house flippers, and landlords in your area by entering search terms like “real estate investors,” “I buy houses,” “sell house for cash,” “sell my house quickly,” and so on. You can then browse the results and make a list of the ones that look promising.
- Have the right info on hand. Whether a buyer is contacting you or you’re reaching out to them, be sure to have all of the key property information available. The buyer will likely request your asking price, the cost of any required repairs, photos and/or videos, and neighboring sales comps.
6. Show up at fixer-uppers’ open houses
Kurzner suggests checking the MLS to find fixer-uppers for sale in your area, then showing up to the open houses. There’s a good chance you’ll run into some cash buyers who are actively seeking investment opportunities. Introduce yourself and ask for their cards, then follow up with them later to pitch your property.
7. Go the ‘Simple’ route
If all of the above options sound like a ton of work and you don’t have the time to put out feelers and manually compile a list, we’d recommend taking a look at HomeLight’s Simple Sale platform.
Simple Sale is the largest real estate cash buyer network in the U.S., and we built the platform to make it easier for any seller to connect with cash buyers actively seeking homes in their area. The platform operates on the idea that in every market you can find your ideal cash buyer “match.” It’s like going out and carefully creating a list of hand-picked buyers, except we’ll do all the work for you and introduce you to the highest bidder.
Just fill out some information about your home and location and we’ll determine which cash buyer is the best fit for you based on their past transaction history, target price range, and the types of property they’re historically willing to purchase. By bringing together multiple buyers, we also let them compete to buy your home, so you get the best offer.
We estimate a home’s Simple Sale to be around 90%-95% of market value, but it could be lower depending on how much work your house needs. Remember, cash offers are typically discounted as a trade off for the convenience of a quick closing.
Who’s got the cash you need?
When it comes to a speedy, hassle-free home sale, cash is king. With an all-cash deal, there’s no need to wait for financing to be finalized, and no worries about a low appraisal gumming up the works. As a result, closings are markedly quicker: as fast as seven days.
“Sellers are looking for cash buyers for one of two reasons: either they need a quick, non-contingency ‘for sure’ sale to get themselves out of a financial or time-crunch problem, or they just don’t want to go the traditional route of listing, showings, inspections, contingencies, commissions, and paperwork drama,” says Kurzner.
If this sounds like you, a cash buyer is going to be the best fit for your selling goals. HomeLight is always here to help you connect with cash buyers in your area, or find an investor-savvy real estate agent, so don’t hesitate to reach out.
Header Image Source: (Clay Banks / Unsplash)