The process of closing the sale of a home is often delayed. The buyer’s excitement or the seller’s need for cash can be a rather desperate period.
This issue can change significantly when the house negotiation is not through a loan or credit but by paying directly in cash. And those who are selling a house may want to know this to be convinced.
How long does it take to close on a house with cash?
When we discuss a significant change when the purchase of the house is made in cash, it is a very positive change.
The time it takes to close the sale and purchase of a house in normal conditions, when there is a lender or bank involved in granting the credit or mortgage, is usually 1 to 2 months.
On the other hand, when the sale and purchase are made in cash, this time can be considerably reduced, reaching 1 to 2 weeks in normal conditions.
When the whole process seems optimized and there is no inconvenience, it can take between 4 and 10 days. Yes, it is more or less; it depends largely on the advice of both the seller and the buyer.
Why is the purchase faster in cash?
Now that you know the noticeable time difference, it is normal to wonder why a cash purchase is as fast as a loan purchase.
The homeowner is more confident about the sale
Around cash home purchases, a sort of security has been created in the market. The seller feels much more confident when a buyer offers cash without credit.
Because whoever has that much cash on hand is probably a trustworthy person with whom there should be no hassle. In addition, cash purchase and sale represent a buyer who is sure to complete the transaction.
And that’s what sellers want. Landlords don’t want to wait for indecisive people who have to consider whether to apply for credit. They want a person with whom they can quickly finalize the deal.
No appraisals or inspections
Getting a home loan is by no means an easy task. It requires a lot of dedication and time, and above all, a lot of patience.
The banks or whoever is going to make the loan must make sure that the loan is worth the money so that the borrower will not have major problems paying in the future.
For that reason, banks and lenders generally reject loans for houses in poor condition or where a lot of remodeling or finishing work is needed.
To ensure you make a good investment with your loan, they must perform a series of inspections to evaluate the house’s smallest detail. The bank itself usually sets a date for these inspections.
Sellers must not only wait for the bank to come and perform the inspections, but they must also wait for the appraisals, where the bank evaluates if the price offered for the house is reasonable.
No time is wasted on repairs or modifications
When the house is not exactly in the best condition, the seller may choose to make repairs or modifications to make it more attractive for a loan to complete the sale quickly.
This entire repair or modification process is time-consuming, ranging from a few hours to several days.
When bidding on the house for cash, it is up to the buyer to decide whether the house is suitable for him or her in its current condition. If it is suitable, they only proceed with the purchase.
In cases where the house is unsuitable due to the amount of repairs needed, the buyer may choose to lower the offer and purchase the house without needing the approval of a third party.
Don’t wait for credit approval
As you might expect, this entire process is done to obtain credit approval. Finally, after having done all the inspections, appraisals, and requested many documents, the bank takes the task of considering it.
After having considered whether it is worth granting the loan for the house, the bank issues an approval or denial. When it comes to approval, you must wait a little longer before proceeding with the purchase and sale.
With cash, the process is much simpler. Once the seller and buyer agree on the sale and purchase, they only need to proceed to collect the necessary documents.
Once they have finished collecting all the documents, they can instantly proceed with their transaction. The buyer must transfer the cash to the seller’s account, and the seller gives you possession of the house.