Investors that want to buy your house for cash – we’ve all seen the signs – are looking for an opportunity to get cheap property. This doesn’t sound great for homeowners, but it comes with a ton of advantages for people that want to sell their homes quickly and with as little hassle as possible.
“We buy homes for cash” companies make profits by skipping most of the red tape that normally goes into a real estate transaction, from financing to showings to credit checks to closing costs. They buy your property for a lump cash sum. For homeowners, this means they can also skip the expensive hassle of conventional real estate transactions. The cash offer will be less than the market value of the house but could be more than the real cost of closing and selling a home.
Are cash home buyers legitimate opportunities for homeowners that want to make a quick sale? Here’s the real deal with these companies.
The first thing to understand about these home buying companies is that they target homeowners who fit a certain profile. They’re not looking for just any old home sale – they’re looking for people moving because of a messy divorce, homes that are in foreclosure or probate, expired listings, evictions, vacancies, and home damage. In other words, they’re looking for opportunities.
In all these situations, homeowners are less likely to negotiate prices, partly because conventional real estate agents aren’t really an option for them. They just want to get out quickly and will be more willing to take a cash settlement and forego the hassle of selling through the usual channels.
Just because a home buying company is being opportunistic, however, doesn’t mean that sellers lose in the deal. These houses are opportunities precisely because the owners want to get out fast or can’t sell their house with a normal listing. For many sellers, a cash offer is a way out.
Hiring a Homer Buyer
If you decide to sell your home for cash, you should know how they assess your situation so that you can do so as well. First, the company will make an appointment to view your house. They’ll ask about your mortgage situation and at that point, the deal could be done. With a house that still has a mortgage, cash home buyers usually offer the remaining balance on the mortgage. In this case, you won’t make anything on the house, but you won’t owe the bank any more either.
Cash home buyers make offers in non-mortgage situations based on market value. They usually pay around half (maybe a little more) of what the house can be expected to get in the current market. That seems like a scam, at first, but here are a few reasons why a cash offer, even a low one, may not be such a bad thing.
Most sellers have no idea how much time and money goes into a typical real estate sale. They not only have mortgage loans to consider, but also closing costs like appraisals, document fees, loan fees, processing, and even credit checks on buyers. After your house has been inspected, you may need expensive repairs to even be able to put it on the market. That’s more money spent up-front before you’ve even made a listing.
These extra costs can be avoided by using a home buying company. You should add these costs to their offer to see how much you’re saving in reality by taking the cash.
Not only do those extra steps cost money, but time is also an issue in a conventional real estate sale as well. People who have kids or busy jobs may not want to hire appraisers, assemble documents, run credit checks, and do walk-ins and showings. Negotiations can also be time-consuming and stressful, especially for people who are dealing with a messy divorce, vacancy, probate, or other trouble.
Home buying companies take care of all this and save you time. If you want to get out quick, you can tell them to close whenever is most convenient for you, whether it’s two weeks or two months from getting the offer.
Especially if you have a mortgage on the house, your conventional home sale could become complicated. The deal could fall through with the bank, the buyer could turn out to be a scam, or the offer could change while you’re thinking about it.
Home buying companies offer homeowners less risk overall. Their deals don’t fall through because they’re immediate. You can accept the cash and hand over the house and all its responsibilities, or you can decline. These companies look for sellers who are desperate because they’re more likely to accept the offer.
However, if you are desperate, such an offer could be a welcome escape. Your desperation may come from expensive repairs, an inability to sell on the open market, a divorce, problems with the bank, or a hundred other things. For the home buying company, you represent an opportunity, but they could easily be your opportunity as well.
Tips on Choosing a Home Buying Company
To make sure your home buying company is an opportunity, here are a few tips on how to choose one.
- If they start talking about fees, signing fees, appraisals, etc., RUN. Home buying companies offer cash for homes and take care of the rest. Credible companies don’t ask the homeowners to pay fees to get an offer.
- Credible home buyers have an online presence that makes sense with a modern company. In other words, their website has more than just an address, they display testimonials, link to active social media accounts, and show up on non-affiliated review sites.
- Home buying companies should be answering their phone and email, listening to you, meeting you in-person, and getting you an offer. If they seem unavailable or unreliable, they may not be credible.
The Takeaway for Homeowners
The real deal with “we buy homes for cash” companies is that they’re looking for opportunities to make easy investments on a property that the owner doesn’t want to hassle with. They make money in the long run by taking their time, repairing the home, and strategically placing it on the market, all the things which many homeowners, for one reason or another, want to avoid.
This means that to save time and money, many homeowners can and should take advantage of a good cash offer. If your financial situation makes time an issue, a cash offer may be your best option. Contact email@example.com to see your best options to sell your home for cash and get the most for your property today.