Finding a cash buyer in the Shreveport-Bossier City area isn't hard, but knowing how it benefits you, and how to spot a buyer who isn't really paying cash, is what separates a smooth sale from a stressful one.
How a Cash Sale Compares to a Traditional Sale
In general, a cash home buyer is someone who has enough money to pay for a property with cash. This is a good thing for a seller who can find a cash buyer to purchase their property, because they have several advantages over a buyer who requires a bank loan (mortgage). Cash buyers can close more quickly, avoid appraisal renegotiations, and complete the purchase of the property without any "required" repairs.
For instance, when an interested buyer follows the most common path to purchase a property, they have to apply for a mortgage loan with a bank. This usually takes between thirty to forty-five days from signing a purchase/sale agreement to the closing table (where the property officially and legally changes ownership in the presence of a real estate attorney). This lengthy timeline is because of most banks' internal review (also called "underwriting") steps to ensure that the buyer is going to be able to pay the bank back. This roughly consists of one to two weeks of home inspections, one week for credit review and gathering tax and bank documents, another week for appraisal, and a week for title review and balancing all the numbers for the transaction. It adds up quickly.
With a cash buyer, there is no need for an appraisal or a bank reviewing credit or documents. And the buyer can get the title work going while they do an inspection, if they choose to do one at all. A solid cash buyer can close in as little as 5-10 business days.
Listing with a real estate agent is different too. Real estate agents may have a cash buyer for your property, but most clients that agents help are going to be using a mortgage. In addition to the bank timeline above, a traditional buyer with a mortgage requires the home to be in relatively good condition. The buyer will get a home inspection, and they will most likely request that you make repairs. This adds more negotiation and potential headaches to the process. Even after you come to an agreement with the buyer about those repairs, it's possible that the appraisal will note additional repairs that need to be made. Even worse, the appraisal may value the home for less than what you and the buyer agreed to, so there would need to be even more negotiation.
A true cash buyer can avoid these headaches.
Cash Buyer vs. Wholesaler: What's the Difference?
But not all people who claim to be cash buyers truly are. How can you tell the difference?
Some people market themselves as "cash buyers" but are actually what the industry calls "wholesalers." Wholesalers usually don't have the cash to purchase the property themselves, but they plan to sell the contract to an investor who does have the cash to close. The catch is in the price difference. They'll get your property under contract at a certain price, then turn around and market it to cash buyers for a higher price, pocketing the difference for themselves.
Louisiana's New Wholesaling Law
Wholesalers are like any other profession, where some are great at what they do and work with honesty and integrity, but there are also those who are dishonest, shady, and try to take advantage of sellers who may not know any better. Thankfully, Louisiana recently enacted a law regarding wholesaling properties, to regulate this previously unregulated type of property transaction. To be legal, a wholesaler must meet certain requirements, some of which are summarized below:
- Clearly disclose their intent to sell the contract to another party.
- Give the seller at least five days to rescind the contract.
- Put a 1% of the purchase price deposit in escrow (usually held by a title company), refundable to the buyer under certain conditions and kept by the seller in others.
You can review the official language and find more information at the Louisiana Real Estate Commission website.
How to Vet a Wholesaler
Check the quality of the wholesaler by asking them about their website, how many deals they've done, and which title company they typically work with. Then call that title company and ask how they feel about working with the wholesaler. This short phone call could mean the difference between falling out of contract at the closing table and walking away with your money in hand and property problems solved.
Why Work with A&M Homes?
Other cash buyers are investors who intend to pay cash for the property and keep it for themselves, whether to fix it up and sell it or rent it out. These buyers are usually a little more serious and have experience closing deals without drawn-out processes. For instance, at A&M Homes, we are end-buyers. We close on properties ourselves, usually within 7-10 days, after a quick walkthrough and home inspection, which we use for our information only. No repairs are required for us to close.
You can check out our Shreveport page for more on how we work locally, see some of our finished projects on Our Work, or look us up on Google reviews or Facebook.
If you want a true cash buyer experienced with smooth, stress-free processes, reach out to us or call/text us at 318-218-8762.