Cash offer or list it? Selling a Sarasota home as is
How cash and we-buy-houses offers work in Sarasota, why they usually come in below market, when they make sense, and how listing as is compares.
A cash offer trades price for speed and convenience. “We buy houses” buyers can close quickly, take the home in any condition and skip showings, but they usually pay less than the home would bring on the open market, because their offer has to leave room for repairs and a profit. Listing the home as is on the MLS often brings more, so get both numbers in writing and compare what you’d walk away with.
There’s also a third option many owners forget, renting the home, which we cover below.
How do cash and “we buy houses” offers work?
There are a few kinds of cash buyers, and they work differently.
Investors who buy to fix and resell. They look at what the home would sell for after repairs, subtract the repair cost, the cost of holding the home while they work, the cost of selling it again and the profit they need. What’s left is their offer.
Investors who buy to rent. They price the home on the rent it can bring after any work, and on what they need to earn on their money.
Wholesalers. Some “we buy houses” companies don’t plan to buy the home at all. They sign a contract with you, then sell that contract to another investor for more. That’s not always a problem, but it can mean a long wait while they look for a buyer, and a deal that falls apart if they can’t find one.
Companies that make instant offers online. They price from data and an inspection, then often take a service charge and repair credits out of the offer. Read the final numbers, not the first one.
Most cash offers move fast: a short inspection, no lender, usually no appraisal and a closing in a few weeks or sooner if the title is clear.
Why do cash offers usually come in below market?
Because the buyer is taking on the work and the risk you’d be handing off. They’re paying for repairs, months of taxes, insurance and utilities while the home is being fixed, the cost to sell it again, and a margin in case the job goes over budget. All of that comes out of your price.
There’s also less competition. When one company makes you an offer by mail or phone, nobody else is bidding against them. On the MLS, the same home is in front of every buyer and every agent at once.
When does a cash offer make sense?
Sometimes it really is the better choice. A cash sale can make sense when:
- The home needs major work you can’t pay for or don’t want to manage, like a roof, foundation or storm damage
- An older roof or other issues would make it hard for a buyer to get insurance or a loan, which narrows the buyer pool to cash anyway
- You need to close by a date, or need certainty more than top dollar
- You’re settling an estate from out of town and can’t oversee repairs and showings (talk to an attorney about probate first)
- There’s a tenant in the home and showings would be hard
Even then, you can get several cash offers instead of one, which brings back some of the competition.
What does listing as is on the MLS look like?
Listing as is means you’re telling buyers up front that you won’t make repairs. In Florida, many of these sales use an as is contract: the buyer can still inspect the home and cancel during the inspection period, but the seller isn’t agreeing to fix what the inspection finds.
You get most of what a cash buyer offers, without giving up the open market. The home is in front of financed buyers, buyers who want a project, and the same investors who would have mailed you an offer, now competing with each other. Price it to reflect the condition and buyers can see why.
You still have to tell buyers what you know. Florida sellers have a duty to disclose known problems that materially affect the value and that a buyer couldn’t easily see, and Florida law (section 689.302) requires a flood disclosure at or before contract signing. A real estate attorney can explain what applies to you. We go into this in getting a Sarasota home ready to sell.
| Cash or we-buy-houses offer | List as is on the MLS | Rent it out | |
|---|---|---|---|
| Speed | Often a few weeks, sometimes faster | Time on market plus a typical closing | No sale. A lease can start once the home is ready |
| Price | Usually below market value | Market value for the home in its condition | Monthly rent, and you keep the home |
| Repairs | None. The buyer takes the home as is | None required, but buyers price them in | Safety and working systems before a tenant moves in |
| Showings | One or two visits | Showings while listed | Showings to applicants, then a tenant lives there |
| Certainty | High with a real buyer and proof of funds, lower with a wholesaler | Buyer can cancel during inspection; financed deals can fall through | Steady income if the rent covers costs, but you are still the owner |
General comparison. Your timing, the home's condition and your plans decide which fits.
How do you compare the two numbers?
Compare net to net. A cash offer that sounds high can shrink once you read the closing costs, repair credits and service charges in the contract. A listing price that sounds high can shrink too, once you take out closing costs, any credits a buyer asks for and the months of carrying costs while it’s on the market.
Ask the cash buyer for a written offer with the closing date, deposit amount and who pays which costs. Then ask us for a written pricing opinion. Ours includes an estimate of what you’d net after closing costs, usually within 24 hours, from our home value page. Put them side by side. Our post on what your Sarasota home is worth explains how we get to that number.
Is renting the home a third option?
It can be. If you don’t need the cash right away, renting the home can cover its costs while you decide, and some owners sell later when the timing is better. It does mean the home has to be in safe, working shape for a tenant, and you’ll want someone handling repairs and rent collection, especially if you live out of town.
We lease and manage homes across Sarasota and Manatee, so we can give you a rent range next to your sale price. Start with our rental analysis, and read should I rent out or sell my Sarasota house for the costs and tax questions to bring to your CPA. Our annual leasing page explains how a lease works with us.
What did this look like for an owner we worked with?
[NEEDS RICHARD: a real example of a seller who had a cash offer and compared it with listing (no names): the home’s condition, what they chose, and the difference in round terms]
What’s the next step?
Get your listing number before you answer that cash offer. Fill out our home value form and we’ll send a written pricing opinion with an estimate of your net, usually within 24 hours. If you’d like a rent range too, choose “Comparing both” on the form.
