Cash Buyers vs. Traditional Buyers: Which is Faster?

When it comes to selling your home, one of the big decisions you'll face is whether to go with a cash buyer or someone who's getting a mortgage. Although both are good ideas, each have its own disadvantages as well.

However, if speed is your top priority – which means you want to sell house fast in Texas, understanding the differences between cash and mortgage is essential. So, let's dive into the details and see which option might get you to the finish line faster!

But first, let’s take a look at the definition of which is which.

What is a Cash Buyer?

A cash buyer is someone who can purchase your home outright without the need for a mortgage or other financing. These buyers typically have the funds readily available, which can include:

 Real Estate Investors: Individuals or companies that buy homes to flip, rent out, or hold as long-term investments.

Buy-and-Hold Investors: Buyers looking to add properties to their portfolio for rental income.

Wealthy Individuals: People who have the financial means to pay cash for a home.

Remember, cash buyers are usually interested in quick interactions, which can be appealing if you’re really looking to sell a house fast.

What Is a Traditional Buyer?

As opposed to a cash buyer, a traditional buyer needs a mortgage or other form of financing to purchase a home.

To specify, here are the most common traditional buyers you may encounter;

Pre-Approved Buyers: These buyers have been pre-approved for a mortgage, meaning they have already gone through a basic financial check with a lender.

First-Time Homebuyers: Often needing a mortgage, first-time buyers typically go through a longer process to secure financing.

Families or Individuals Upgrading: Buyers moving from one home to another, usually needing to sell their current home before buying a new one.

While traditional buyers make up the majority of the market, the process of securing a mortgage can take time, which might slow down the sale.

The Speed of the Sale

We can all agree that when it comes to speed, cash buyers almost always have the advantage. Here’s why;

No Mortgage Approval Process

Getting a mortgage approved can be like waiting for your favorite TV show to drop a new season—it can take 30 to 60 days, sometimes even longer, depending on the buyer's finances and the lender’s checklist. Cash buyers, though, can fast forward through this part entirely, shaving off a huge chunk of time from the whole closing process.

Fewer Contingencies

Traditional buyers often come with a list of contingencies, like financing, appraisal, and inspection requirements, which can slow things down or even throw a wrench in the works. Cash buyers, on the other hand, usually have fewer of these red tape hurdles, making the whole process much smoother and faster.

Quicker Closing

Since there’s no need to wait for loan approval, cash sales can close in as little as a week. According to ATTOM Data Solutions, cash sales in 2023 closed, on average, within 14 days, compared to 30-45 days for traditional sales.

If you want to know more information, reading this blog about selling your home in cash is a big help!

What about flexibility and negotiations?

Cash buyers often have more flexibility in negotiations because they don’t need to satisfy a lender's requirements. For instance;

As-Is Sales

Cash buyers are often more willing to purchase a home "as-is," meaning you won’t have to spend time and money on repairs. This can be a significant time-saver if your home needs work.

Faster Negotiations

Without the need for lender approval, negotiations with cash buyers can be quicker and more straightforward. If both parties are motivated, a deal can be struck in a matter of days.

Certainty of Sale

Cash buyers offer more certainty that the sale will go through. With traditional buyers, there’s always a risk that financing could fall through at the last minute, causing delays or even a collapsed sale.

Which Option Is Right for You?

Choosing between a cash buyer and a traditional buyer really depends on your priorities:

1.    If Speed Is Your Top Priority: A cash buyer is almost always the faster option. With fewer hoops to jump through and a quicker closing process, you can move on to your next chapter sooner.

2.    If Getting the Best Price Is Crucial: If you have time and want to maximize your sale price, a traditional buyer might be the better option. The process takes longer, but you might end up with a higher final sale price.

3.    If Your Home Needs Repairs: Cash buyers are typically more willing to purchase homes in need of repairs, saving you time and the hassle of fixing up the property.

Conclusion

When choosing between cash buyers and traditional buyers, think about what's most important to you—speed or price. Cash buyers offer a quicker and more straightforward process, which is perfect if you need to sell fast or if your home needs some TLC. However, if you have a bit more time and want to squeeze out the highest price for your home, holding out for a traditional buyer might be worth it.