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How to Sell Your House Fast in Houston
When you're selling a house in Houston that needs to sell quickly, you're often looking to sell to a cash buyer. Why? Foreclosure sale dates are approaching, or you're moving due to a job transfer. Maybe you inherited the place. Or it's just a vacant house that's taking up space. Whatever the case, there is a tradeoff. You'll exchange the retail upside that accompanies a sale to a motivated, aggressive buyer that benefits from a protracted sales process for a shorter, cleaner one.
When you work with a cash buyer, it eliminates all the variables and potential pitfalls associated with underwriting a mortgage loan. It removes the possibility that the transaction could fall apart based on an appraisal contingency or if the buyer can't secure financing. What's more, the purchasing process is much simpler and faster than a sale to a traditional buyer. For the seller, however, the cost is that he or she must be prepared to provide the cash buyer with a clear title to the property, any expected payoff figures at the time of closing, and all the disclosures required by Texas Property Code Section 5.008.
The first thing a serious cash buyer will do is ask about the property. Think about how you'd walk through it yourself. The buyer will want the exact address and current condition. Who lives in the house? What about pets? Is there a mortgage or any other liens? If the property is vacant, what date does the seller prefer for closing? The cash buyer will also want to see photos and any bids for repairs already obtained. If there was an insurance claim, it should be disclosed, as well as the survey, if available. If there's a lease, provide a copy of the agreement. If there are pending notices from the homeowners association, provide a copy. And you'll need to send a copy of your recent tax statements, too.
Now the prospective cash buyer will make an offer. A good offer will include a purchase price, an earnest money deposit, the option period and length of home inspection, a target closing date, and what items will be included in the sale. It should also identify the cost of title insurance and escrow fees. Also included should be the renegotiation terms: If the buyer decides not to buy the property, what happens? If the owner decides not to sell, what happens? If the offer is nothing more than a text message with a number, politely ask the person to send the full contract.
The buyer's title company should have been ordered for a title search, and a request has been made to each lender and title company involved in the life of the property to provide details of each lien, insurance policy, and title change so that the buyer's title company can determine whether the title and deed is properly clear and marketable. If so, the title company orders a payoff from each lender and prepares a closing package and settlement statement. If the buyer is paying all the closing costs, be sure to request a copy of the settlement statement, just to confirm that the title company has not inflated its fees. The title company is also responsible for the immediate delivery to the seller of the proceeds, either by wire transfer or certified check, assuming that the buyer has received a copy of the settlement statement and confirmed that it is satisfactory.
The target closing date should be in 7 to 14 days if the title company can clear the title cleanly, the seller is available, there is no probate, divorce, lien, HOA, or tenant involved. The closing date agreed to in the contract should match the seller's move date, not the buyer's lender's calendar of loan originations.
If this house is being sold before a foreclosure, that means the sale should be completed before this debt will turn from a mortgage obligation into a confirmed cash payoff and transfer of property as an asset on the lender's books. In some cases, the payoff date differs from the date of reinstatement of payments and from the projected date of sale. It is important that the seller call the servicer, request the exact payoff figure, the reinstatement figures, and the projected sale date, and get written confirmation of each. The title company will also need to be informed so that the appropriate closing statements can be prepared for a complicated sale.
If the house was inherited, the heirs take not only the title to the house but also become responsible for the lawn care, utilities, insurance payments, tax bills, removal of personal property left behind, and maintenance and repair costs. A cash offer from a ready, willing, and able buyer gives the seller a known net amount for the house, as opposed to the uncertain carrying costs. The person presenting the offer must be provided with written confirmation of the heir's authority to sell the home as well as confirmation that the property is not in probate.
In divorce sales, a cash closing date can be scheduled quickly and without the inconveniences of numerous showings. The period in which the buyer can make requests to fix things will be shorter, especially agreement periods on repairs, access, price reductions, and other requests or conditions that had been imposed on the subject contract. Also, the contract must match exactly the divorce decree; schedule both parties to sign the contract at the same time as both are able to do so in order to expedite the process of getting the necessary signatures.
Relocations due to new jobs, especially in the energy, medical, logistics, or aerospace industries, happen quickly. Carrying two homes for two months can be expensive in mortgage payments, utilities, insurance, maintenance, and security. Receiving the maximum possible at closing releases the seller from the duplicate housing expense and also means several workdays won't be lost waiting for a move to close in a competitive area.
Major repairs can turn a "fixer-upper" into a quick cash sale. Major deficiencies such as slab foundation problems, roof leaks, plumbing or sewer main damage, mold or fire damage, and galvanized plumbing have the tendency to make house lovers turn away, as well as scare off those willing to pay in advance for repairs. A cash house buyer expects some risk in accepting a quick sale; he compares the offer received against the estimated repair cost bids and against what would have been a realistic listing estimate. The seller compares both figures against the price he might imagine if the house were perfectly presented and newly rehabbed.
Proof of funds – a current bank statement, a letter from a financial institution, or other documentation that shows that the buyer has access to the stated price.
Use a recognized title company or escrow account controlled by an independent attorney. If you are presented with a direct offer from an individual, take caution that he does not ask you to pay title company fees, direct your closing with the title company, sign the deed outside of the closing, or ask you to ignore liens or co-owner signatures. A legitimate cash buyer will clearly tell you how he controls the funds he will pay you, without requesting title, running the escrow, or disregarding collateral.
Compare net proceeds: You receive $250,000 in cash at closing and pay for the closing costs yourself; there are no repairs due to property damage. A perfectly comparable or better listed home would sell for perhaps $260,000 (this might be the price you expect if all your costs, your repair work, and your closing costs were paid by the buyer of a traditional sale). But that second scenario will incur closing costs, title charges, repair credits, repair concessions, or other fee combinations, and the check you would receive is nowhere near $260,000. You need to make sure you have an objective way of comparing the options.
Compare like items: Compare the price, minus the real estate commissions if the buyer is paying his own (most will offer an all-inclusive negotiated price), minus the closing and title charges, minus any repair costs, the quality of the repairs, and the liability risk, the closing day, the date on which he'll pay real estate taxes (for the month of sale), the month of sale plus any reasonable moving expenses, the mortgage payments that he'll pay until closing (if any), the utility expense (water, electricity, cable, etc.) that he'll pay until closing, or the agreement to leave utilities connected until he moves in, insurance cancellation date, insurance risk (moving in to an empty house, turning off water, etc.), and whether the check comes today or in escrow.
Check out a buyer on Reviews: Search for reviews about his company or the individual's first and last name. Look for signs of communication problems, closing delays, unexpected deductions that significantly reduced the sale proceeds after closing, and unprofessional, disrespectful treatment of the seller. One detailed account from a seller with a clear story about his experience is worth more than a dozen five-star blurbs written by someone who doesn't remember what he experienced. Search the name of the company involved in the transaction, plus the word "complaint," "lawsuit," or any other term that would explain the review that you want to avoid, and the word "Houston." If you're cautious about risks and not conveniently located near the property, you can ask for a virtual property tour instead of meeting in person.
Cash offers are typically lower than the amount that you could expect at a traditional real estate sale. This is because cash buyers have to bite the bullet and do the repair work before the house sells; the resale business carries some risk on cash buyers (the house may fail to sell at their expected price); cash buyers hold the house a couple of months before it sells; and cash offers for the purchase of existing homes carry a hefty premium above their acquisition cost. For example, think of a house in excellent condition that fetches $450,000 at a traditional listing. This is its retail value. Its repaired value is $300,000 after significant repair work that has brought it up to good condition. The cash buyer would expect only a very modest return on his $45,000 repair work, and he'd prefer to hold the house as long as possible, which explains why his offer is significantly less. The same house in excellent condition, needing only a fresh coat of paint and new appliances, might attract a competitive listing offer of $300,000. In contrast, a comparable brand new home in excellent condition would likely list for $300,000, so the cash buyer wants a much smaller return for his repair work.
Neighborhoods in Houston: Montrose, Heights, Midtown, Spring Branch, East End, Third Ward, Katy, Sugar Land, Cypress, Pasadena, North Houston, and surrounding suburbs. Factors affecting a selling price include lot size (bay, corner, through), flood history, school zone, nearby street routes for commute, rental demand, deed restrictions, and homeowner association rules. Property types include single-family homes, townhomes, condos, duplexes, and tenant-occupied rentals. Each has different closing steps.
Gathering documents: Look for your deed, a photo ID, the statements for your mortgage, your tax account number information, a phone number for your HOA or PMI company, contact numbers and addresses for your tenants, any repair or improvement invoices you've paid, insurance claims for storm or hail damage, and any lien, code violation, or probate notices you've received.
Missing documents aren't automatic sale stoppers, but the earlier you give them to your GetHomeCash agent, the better. Otherwise, they become a delay in your sale.
Prepare questions for different cash buyers: Do you need estimates on repair costs? Do I have to be at a showing? How many comparable sales did you look at? What are your closing costs? Does your earnest money deposit have to be in on the day we sign? Can I schedule an inspection the day after I sign? What happens if I discover a lien or code violation?
Pros and cons of selling a traditional listing: You get more money if your house is in good condition and you can spend time fixing it up before the sale. You have time to take good photos, arrange showings, negotiate price and terms, and get a timeline from the lender. On the other hand, a cash sale can be stronger if your house is in a distressed condition or if your deadline is fixed. If access to your home is difficult, then a cash sale makes more sense than a listing. If you can sell your house quickly with a cash buyer, then a listing makes less sense than a cash sale even if you have maximum exposure for a longer period.
I call this decision rule the Kitchen Sink Rule: If time, condition, and cooperation of your tenants are all in your favor, list. If not, then consider selling to a cash buyer. But consider selling to a cash buyer even if everything is in your favor if a delay in selling will create extra costs or risks. See how much time you're willing to spend and how good a buy/sell list you'll have. Then get one or two offers from cash investors who can close quickly. To see which offer gives you the most money from the investor, ask your listing agent to provide a net sheet for each offer. A net sheet has net proceeds after subtracting repair, closing costs, and carrying costs. Also include your desired escrow to hold the purchase money. Then add the profit margin the investor wants to keep. Compare the numbers for different offers.
When it's clear that you want to sell your Houston house to a cash buyer, contact GetHomeCash.com at 866-507-2911 or email a letter with your address, notes about your house's condition, and your preferred closing date. They will review your written offer terms in detail. No staging or showings. No repairs.
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