Selling to Florida Cash Home Buyers: Tips from Experts

Disclaimer: A friendly reminder, information in this blog post is meant to be used for educational purposes only, not as a substitute for professional tax or legal advice. If you need help navigating the intricacies of selling your home in the state of Florida or elsewhere, HomeLight always encourages you to reach out to your own independent advisor. 

Looking to connect with a Florida cash home buyer for a quick sale in the Sunshine State? Good news: Housing in the Sunshine State couldn’t be a hotter commodity. And the state is projecting continued strong growth for the next several years. The destination’s great weather and tax-friendliness bring a steady stream of buyers to the market, and cash buyers help make sellers’ homes fly.

In addition, 34% of Florida housing units are occupied by renters, so the state remains a hotspot for investor activity. Whether you’re looking to unload your own beach rental, escape hurricane season, or seek to boost your Florida retirement savings with a quick property sale, review our guide to working with Florida cash home buyers and selling your house for cash whenever you’re ready.

Sell Your Home As-Is With a Competitive Cash Offer

HomeLight’s Simple Sale platform provides all-cash offers, giving clients a fast, stress-free home selling experience without having to worry about additional repairs or prep work and with no additional fees, commissions, or upfront costs.

Pros of working with a Florida cash home buyer

A cash offer can lead to a speedier and lower hassle sale. Let’s review some of the top reasons to work with a cash home buyer in Florida:

Faster time to close

Imagine you list your home for sale and attract a buyer right away who is also willing to offer a top price. Great! However, this buyer needs a mortgage to finance the deal, and that can take months. By contrast, a cash sale can be wrapped up in as few as 7 to 10 days since the transaction doesn’t require a lender’s involvement.

Skip the appraisal

Another big benefit of selling for cash in Florida is the opportunity to bypass the appraisal process. When a buyer is using a mortgage, there’s always a chance they offer more than an appraiser thinks your house is worth, potentially putting the sale at risk. When selling for cash, there’s no lender requirement for the property to appraise and the house sells for the amount agreed. Granted, a cash buyer could still decide they want an appraisal, but you have more room to negotiate skipping this step with a cash buyer.

How to find cash buyers in Florida

Looking to fast-track the sale of your Florida home but not sure how to find cash buyers? Max Cohen, the founder of FL Home Buyers, which owns and rents more than 35 properties throughout Southeast Florida, warns that it’s important to be careful when searching for cash buyers. Our network of experts shared some insider tips.

Work with a reputable local real estate agent.

There are plenty of reasons to have a real estate agent in your corner — visibility in the MLS, help with stagings and showings, assistance with negotiations and contracts, to name just a few — and now you can add sourcing a cash buyer to the list.

Niakin says that most agents have a broad network of active investors. This can save you the hassle of contacting cash buyers who may not be a good match for your property. The agent can check their database to see which investors are seeking a house similar to yours in terms of neighborhood, square footage, price range, and upgrades.

Focus on out-of-state buyers.

“Those who are looking to relocate to Florida are the most likely to be cash buyers right now,” says Justin Nepola, a real estate attorney in Hollywood, Florida. This is another area where a top agent can help you tap into the out-of-state market. Buyers who currently live elsewhere but are seeking homes in the Sunshine State will often team up with a Florida real estate agent who has an intimate knowledge of the area.

Do your due diligence.

If a home-buying company has expressed interest in buying your property, Cohen says to check with sunbiz.org — the Division of Corporations, which is the state of Florida’s official business entity index and commercial activity website — to make sure the would-be buyer is a legitimate company registered with the state of Florida. Also check to make sure the company is listed with the Better Business Bureau.

Before signing an offer, ask for proof of funds.

This may come in the form of a download or print-out of the buyer’s business checking account showing that they have the cash to purchase the subject property, says Cohen. “If the cash buyer you are talking to does not want to provide you with this, RUN,” he says. “And if you see a vague document saying something along the lines of ‘XYZ123 Home Buyers are approved up to $XXX,000,’ RUN. The serious, professional, reliable home buyers will gladly show you legitimate proof of funds.”

How to request a cash offer in Florida

Not sure how to find a cash buyer in Florida? If you’re looking for a fast, easy home sale, we’d recommend our Simple Sale platform, which has nationwide coverage (including for the state of Florida). Through Simple Sale, HomeLight provides you with an all-cash offer for your home.

You can skip the repairs, prepwork, and open houses and go straight to receiving an offer. Whether you’re moving into a waterfront one-bedroom for your retirement days or escaping the humidity with a transfer to the desert, a cash offer through Simple Sale can help you sell your home in a matter of days, not months.

Going in, you should know that cash buyers tend to offer a lower price than buyers on the open market. Over the past 40 years, cash buyers have paid 12% less on average than a buyer getting a mortgage, according to one study. However, it also costs a lot of money to sell your home the traditional way, to the tune of an average $31,000.

Inside the Florida cash home buyers market

“In South Florida, the overall landscape is best described as intense,” says Cohen. “There seems to be an endless amount of cash buyers searching for their next deal. If you are looking to sell a deal to an investor, as long as your asking price is not ridiculous, you should not have an issue selling it.”

Sep Niakan, a top-performing Miami real estate agent specializing in condos and single-family homes, reports that South Florida has a highly active cash real estate buyer market. “At our peak in the past year, more than 60% of our sales were cash transactions,” he says.

So who is forking over all of that cash? While there’s no universal profile of who pays cash for a house in Florida, the experts we spoke with say that in this state, cash buyers tend to fall into a few common categories:

International buyers

Niakan finds that Miami has a lot of international buyers who tend to prefer to pay in cash rather than going through the U.S. mortgage process. As of 2019, foreign buyers’ purchases made up 38% of all residential real estate sales in Miami (compared to just 5% nationally), and 63% of foreign buyers paid cash (compared to 41% nationally), according to the Miami Association of Realtors.

Remote workers

Nepola works with a large number of real estate cash buyers in reviewing their purchase contracts. He is seeing an influx of professionals — particularly Wall Street and tech entrepreneurs — who are relocating to Florida because they are no longer tied to a particular location to work. “Working remotely allows them to live and work where they used to vacation,” he says. “In most cases, these buyers are purchasing with cash because they are higher net-worth individuals or they sold a high-value property in another state.”

Clients in search of lower taxes

Florida is one of only a handful of states that doesn’t have an income tax. Niakin has a fair number of clients who own their own businesses, are considering selling a company, or have a large number of stock options and choose to move to Florida for the lower tax liability. In many cases, these buyers have enough cash to purchase a home outright in exchange for the long-term tax savings.

Snowbirds

Niakan also sees a lot of “snowbirds” who buy second homes in Florida later in life, with the intent to live there during the winters. These buyers typically have more cash on hand — or more equity in their primary homes up North — which enables them to purchase a Florida home without having to obtain financing.

Property investors

Investors are more likely than traditional buyers to purchase properties with cash. According to a 2019 study, almost one-fifth of the homes sold in South Florida were purchased by buyers looking to rent them out or renovate and flip them. The market is attractive to investors for a multitude of reasons: There’s been a spike in demand for single-family homes (up 21% over last year), home values have steadily increased (rising nearly 38% over the past five years), and a steady influx of buyers are drawn to the warm, sunny climate and the favorable tax structure.

How much are Florida cash home buyers willing to pay?

Generally speaking, cash investors and home-buying companies are looking to get properties at below-market prices, with sellers trading the extra equity in exchange for a quick closing and added flexibility. House flippers tend to stick to the 70% rule, which states that they should pay no more than 70% of the property’s ARV (after-repair value), including any costs for repairs and upgrades. But in Florida’s competitive cash-buying market, sellers may find that buyers are willing to pay more for properties.

Florida cash buyers: Inching closer to fair market value?

For houses that are in premium areas and are move-in ready, Niakin doesn’t see much of a discount in the offers he fields from cash buyers. “If there is a discount, it’s usually a case where the property is distressed and the seller needs to close quickly, but that’s the exception rather than the rule,” he explains.

In one recent example, Niakin listed a property at $579,000, with not much inventory available at that quality level and price point. He received two offers within one day: one was a cash offer and one was contingent on financing. There was only a $10,000 difference between the two.

Hot market pushes offers higher

Cohen agrees that in his market, the 70% AVR rule has risen along with the spike in housing demand. He has seen off-market buyers willing to pay 80%-85% of the ARV without even seeing the property.

“Part of the logic behind that is that by the time the renovation is completed, these investors are speculating that the housing market will continue to rise and they will make up for what they ‘overpaid,’” he explained.

And in addition to a willingness to offer a more competitive price, Nepola sees many Florida cash buyers accepting seller-added contingencies that might not fly in a less aggressive market. “The most common contingency I am seeing is the waiving of appraisals and very short inspection periods,” he says. “Today’s cash buyers are willing to purchase ‘as-is’ with little to no repairs done by the seller.”

What’s the process of selling to a Florida cash buyer?

Cohen, who purchases dozens of houses for cash in Florida each year, says the process is pretty simple. He breaks it down for us below:

The buyer and seller sign an “as-is” purchase agreement.

With a traditional sale contract, the seller is usually on the hook for any necessary repairs identified during the inspection process. When selling for cash — particularly in a seller’s market like what we’re seeing currently — the buyer and seller will typically sign Florida’s “as-is” contract, which states that the buyer takes ownership of the property in its current state and the seller won’t be responsible for any repairs. Got a water-damaged roof or an air conditioner that’s one season away from failing? Not the seller’s problem, though the buyer may account for it in their offer price. The signed contract is then sent to the title company.

The seller completes a property disclosure.

Even if a buyer is purchasing the house as-is, a seller in Florida still must be forthcoming about any known material defects with the property. To help sellers make the necessary disclosures, the Florida Association of Realtors provides a standard form covering the home quality and characteristics buyers care about. Has the home ever flooded? Does the seller have any knowledge of termites? Has fire or wind ever done structural damage to the home? These are the types of questions and disclosures a seller needs to be honest about in Florida, even if they’re selling for cash.

The buyer runs a title search on the property.

Next, the cash buyer will run a property title search to make sure the seller has legal ownership and to check for any outstanding liens on the property that would prevent it from being sold. “A title search is a review of all of the sales of the subject property to make sure that all paperwork has been done properly and the property has a clear title to sell,” Cohen explains. Some of the most common reasons for title issues in Florida include liens on the property, foreclosures, errors in public records, identity concerns, boundary disputes, and probate issues.

The seller pays any associated fees.

Even when the buyer isn’t getting a mortgage for the purchase, a Florida seller will still be likely responsible for covering some fees associated with the closing, including the documentary stamp tax, the title search fees, transfer taxes ($.70 for each value or fraction of $100), and an estoppel fee, which is used to determine how much the seller owes to settle any existing HOA dues.

Deciding to sell to Florida cash home buyers

When you eliminate home prep costs in Florida — such as fixing roof and siding damage for hurricanes and agent fees of 5%-6%, you may end up with a similar amount of money from a Florida cash buyer as you do with a traditional listing process. Either way, your home is likely to get snatched up fast — given the white-hot level of real estate in this state, you better be ready to move!

Header Image Source: (Colin Lloyd / Unsplash)

Jerrie Parise

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