One of the benefits to owning real estate such as a home is that in most cases it can be sold whenever its owner wishes. The hope of many homeowners, in fact, is that their properties will appreciate enough in value to eventually sell at a profit. There are also several ways in which real estate can be sold, including rent-to-own and contract-for-deed transactions, but the most common way in which a real estate transaction is structured is an outright sale.
Outright Real Estate Sales
In both rent-to-own and contract-for-deed real estate sales, owners retain title to and interest in their properties until buyers fulfill their contracts. By contrast, an outright sale of real estate requires the owner to sell all rights and interests, as well as title, to the property. In an outright real estate sale, the purchaser also pays to the seller the full negotiated sale price. Residential mortgage lenders normally won't approve loans for borrowers unless an outright sale of property is involved.
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All-Cash Real Estate Sales
A sale and purchase of real estate in an all-cash deal is also frequently known as an outright sale. At time of publication, about 30 percent of residential properties are sold outright for cash. Some 70 percent of properties bought by real estate investors or international buyers are also all-cash deals. An all-cash sale of real estate typically takes less time to complete, too. Waits for mortgage approval are eliminated with all-cash property sales, and sellers may even offer discounts for such purchases.
Outright Sale Time Frames
Real estate isn't a completely liquid asset like money; it can take time to convert real estate to cash or other assets. In an outright sale of real estate involving a mortgage loan, for example, it may take from 30 to 45 days for sellers to receive their proceeds. Real estate is much more liquid, though, when it's sold for cash. An all-cash real estate transaction can usually be completed as quickly as the property seller and buyer desire.
Property Title Liens
In an outright sale of real estate involving a mortgage, lenders require the titles to properties their borrowers are purchasing to be free of liens. Liens on real property titles include first and second mortgages, tax liens, and money judgment liens placed by creditors. A real property title lien encumbers that property and can can make its sale difficult. In all-cash outright sales of real estate, buyers should always consider conducting title searches to determine the possible existence of any liens.