What to Know About Investors That Buy Houses For Cash
Are you wondering what the deal is with we buy houses for cash companies? Have you seen the flyers around town on telephone poles that offer to purchase your home for cash quickly?
Maybe you have gotten numerous mailings asking to buy your house for cash? Finding a cash buyer for your home is not that difficult, but it does come with some downsides.
“We buy houses for cash” companies can seem like a great idea if you want to bypass the normal selling process.
Perhaps you are in a rush to sell your home fast, don’t want to have to worry about paying commission, or deal with the uncertainty involved in selling your place.
These kinds of real estate investors offer a compromise for someone who wants to avoid selling for sale by owner.
To help you, we’ll take a look at the companies that buy houses for cash and some of the issues you need to understand before you choose this option.
If you are looking to sell anywhere close to your home’s market value, a we buy houses outfit is not the way to go. If profit is the least of your concerns, then it could be the perfect opportunity for you.
Keep in mind many real estate investors will pay cash for your home. It will be prudent, however, to work with a reputable company. There are tons of scammers in the house-flipping industry.
Here are the real estate investors that buy houses we will be reviewing:
- We Buy Ugly Houses or Homevestors of America
- Fast Home Offer
- Express Homebuyers
- iBuyer Companies
Before selling your house for cash to a “We Buy Houses” company, make sure you understand the pros and cons.
While the companies mentioned here are legit, there are many We Buy Houses ripoffs and scams. You’ll need to avoid these scammers like the plague.
Typically, when you see we buy houses for cash on a handmade sign plastered on a telephone pole, it could be your first clue to keep your eyes peeled for a potential scam artist.
Let’s take a deep dive.
We Buy Ugly Houses
One of the top companies that buy houses is We Buy Ugly Houses. Originally using the business name HomeVestors of America, We Buy Ugly Houses has been around since 1996. They have franchises in most states and have purchased over 100,000 properties since they were established. The franchises are operated by local investors who used the brand to market their service.
Once you have contacted them through their online form or toll-free number, an appointment will be made for a franchisee to inspect your home. They are looking at the property’s condition to help assess its value and make you an offer.
They claim that you don’t have to worry about their offer changing through the process, and if you agree, the closing can be scheduled within 3 or 4 weeks. Out of all the “we buy houses” companies, We Buy Ugly Houses is the most well known.
The company is the number one home buyer in The United States.
The Benefits of Using We Buy Ugly Houses
What are the advantages of We Buy Ugly Houses? You normally won’t have to wait for your offer, getting the cash bid on the day of the inspection. The company will cover the closing costs of the sale. This could save you 1 to 3% of the sale price.
We Buy Ugly Houses doesn’t care if your home isn’t pretty or in bad condition; they will purchase any home. We Buy Ugly Houses will buy houses fast!
The Negatives of Using We Buy Ugly Houses
The biggest downside of We Buy Ugly Houses is what they will pay for your home. Don’t expect them to give you the fair market value of the home. They are looking to make a profit, so so they could offer you as little as half the market value.
Closing could take as long or maybe longer than if you’d sold your home through a traditional listing service. You might have to wait a month for the sale to be completed.
WeBuyHouses.com was founded in 1997 and is a national network of investors. Fill out a form on their website or call to have their local representative visit your home. They will find out more about your house and create an offer which you should receive on the day.
You can accept the offer there and then if you want, but you have up to 30 days to think about it. If you agree, and your situation allows it, the closing could be in as little as a week.
The Advantages to Choosing WeBuyHouses.com
So, what are the pros of We Buy Houses? Most of the company’s purchases close within a couple of weeks of the offer being accepted. So you can expect the same if you deal with them.
You get time to think about the offer they’ve made to you. With your offer being valid for 30-days, you have the opportunity to look around to find a better option.
The Disadvantages of Working With WeBuyHouses.com
Like others, the cons of We Buy Houses is what the company will offer to pay for your house. They say that you can expect a competitive offer on your home, but this is still likely to be well below fair market value.
You can typically only expect to get 70% of the value of the home. Getting offers well below market value is what you can expect from all of these kinds of investment companies.
Remember, their goal is to buy your home on the cheap, fix it up and sell it for a significant profit.
Fast Home Offer
Fast Home Offer has home buyers across America as well as in Canada, Australia, and Mexico. You can fill out their online questionnaire to have one of their local representatives get in contact with you.
They might even offer you a purchase figure over the phone, though this could be updated later. They will also make an appointment to view your home. Once they give you their offer, you can take some time to decide if it is right for you. If you are happy with the amount they offer you, they could close within 14-days.
The Benefits of Fast Home Offer
As their name suggests, closing is often fairly fast. They could set the closing day as between 7 and 14 days. In some situations, you could get an offer over the phone. This will depend on your location and the condition of your property, however.
This company will buy homes that are in any condition. All types of homes are purchased by this business, including commercial property and land.
The Downsides of Fast Home Offer
The “we buy houses for cash” business model means that they will give you less money than if you were to sell the home through traditional options.
Operating in just over half of U.S. states, Express Homebuyers is a network of investors looking to buy homes like yours. They have been in business since 2003 and have purchased over 2,500 homes in that time.
You can call them or fill out their online questionnaire, and they promise to give you a fair cash offer in just 7 minutes. This will likely be just a range of prices you can expect to receive, with one of their representatives needed to inspect your home before they give you their final figure.
If your sale is straightforward and happy with the final price they offer, the sale could close in just 7-days. You then only have to sign the paperwork, and they will schedule your settlement date.
Reasons to Choose Express Homebuyers
They promise to give you an idea of the price you can expect from them within minutes of making contact. This can give you a quick understanding of whether this is the right company to use and if you’ll get the amount of cash you expect.
Most of the time, the offer they give you you will stand for 30-days. This gives you the chance to explore your options further before you commit to selling your home to Express Homebuyers.
You’re closing date could be in just 7 working days away. As long as there aren’t any issues, you could get your money fast.
Negatives Against Express Homebuyers
Though they will give you an offer price quickly, it isn’t going to be an exact offer, and the final price could be significantly below the fair market value.
Express Homebuyers may not buy your property if it isn’t in good condition. They are more choosy than other companies on this list, and if your home isn’t in the best condition, they may not be interested.
The most significant con with Express Homebuyers is they purchase far fewer homes than the other real estate investor companies reviewed.
Video: We Buy Houses For Cash Companies Explained
See a quick explanation of what we buy houses for cash companies do in video format.
Another type of real estate investor that buyers homes are what’s referred to as an iBuyer. The term iBuyer means instant buyer. Like we buy houses for cash companies, an iBuyer will close on your home very rapidly. iBuyers, however, are different from we buy houses for cash companies.
An iBuyer is a real estate investment company that has deep pockets. They can purchase homes with minimal inconvenience for a seller. In order to establish what they will pay for a home, they use a complex algorithm to arrive at what they feel is fair market value.
An iBuyer will decide whether your house is worth buying. They will try to determine how easy it will be to sell and make a cash offer based on their opinion. An iBuyer will then sell the house, usually with minimal improvements, and attempt to make a profit.
Opendoor, which started in 2013, was the first major player in the iBuyer arena. Other companies have since followed suit.
iBuyers tend to stick to homes in excellent condition, which is different from house flippers like we buy houses. Rather than fixing up low priced fixer-uppers that need a lot of work and then renovating them like we buy houses does, iBuyers focus on properties with minimal work.
Their goal is to sell properties quickly without additional investment of capital. The iBuyer wants easy sales. Their model works on buying and selling in volume.
The advantage to a consumer is similar to a we buy houses company in the sense that you can get your home sold fast. The process for selling with an iBuyer is simple. You go to their website, put in your address, fill out a questionnaire, and wait for them to get back to you.
Shortly thereafter, you will get an offer on your home, and it will be a cash offer. If you decide to take the offer, the closing can typically take place in a week.
Opendoor, which was formed in 2013, was the first major iBuyer company. Numerous other iBuyer companies have since followed suit.
Is it a Good Idea to Sell Your Home to a Cash Buyer?
There are many situations where it makes a lot of sense to choose to do business with companies that buy houses. Let’s take a look:
If you absolutely have to quickly sell the property, dealing with a company that will buy houses for cash removes many of these problems. It will get rid of a lot of the uncertainty and stress involved in the house sale process. You will know how much you will get for your house and when the closing will be.
If you have fallen behind on your mortgage payments and are in danger of foreclosure, this could be a better option. It should make sure you avoid damaging your credit history and allows you to keep some of the equity.
If you need to sell your home and there are clear repair issues, a cash buyer could help. When you can’t afford to deal with the repairs, many buy houses for cash businesses will still do a deal.
If you have inherited a home that is perhaps out-of-state, a cash buyer might be an easier option. It will give you a straightforward way to turn the inherited property into cash.
How Much Money Do We Buy Houses for Cash Investors Pay?
Choosing to use buy houses for cash companies means that you’re not going to get the property’s full value. They are investors looking to turn a profit, and to do so, they will not pay you the full market value.
You can expect only to be offered – at best – 70% of the market value. However, you have to remember that they will deduct the cost of repairs from this as well. So, if your home’s fair market value is $250,000, 70% would be $175,000. When the investor then decides that your home needs $30,000 spent on repairs, you could end up with just $145,000.
If you can cover the repairs’ cost, you can expect an extra $75,000 for your home in this example. Not to mention that there is a good chance that they will overestimate the cost of repairs anyway.
Even though you won’t be paying a real estate commission, you will be leaving a ton of money on the table by choosing a “we buy houses” investment company.
While the advantage of going this route is avoiding the hassles of a traditional sale, will it really be worth it when you lose so much money? Only you can determine the answer.
Pros and Cons of We Buy Houses Companies
The pros of cash investors:
- You can sell your home very fast. Great for those who are in some kind of financial distress such as a job loss, death in the family, or a divorce.
- There is no mortgage contingency or home inspection to worry about.
- Home sales are less likely to fall through.
- The condition of your home doesn’t need to be fantastic.
- The investors will be buying your home as-is.
- There are no commissions involved other than with an iBuyer.
The cons of cash investors:
- You will not sell your home anywhere near the market value.
- You’ll be leaving money on the table for certain.
- There are scams and predatory tactics within the industry.
We Buy Houses Near Me
If you have decided that selling your home to an investor for cash is the right way to proceed, you will need to find a local company willing to purchase your home.
One of the better ways to find companies that will buy your home for cash is to do an online search.
I would suggest you use We Buy Houses Near Me or We Buy Houses For Cash Near Me. If one of the larger, more well-known companies is not near your location, you might want to opt for companies that buy houses near me.
These are search terms that should help you locate a cash real estate investor. Just be sure you do your homework before committing.
Final Thoughts on We Buy Houses For Cash Businesses
You do stand to lose a lot by choosing to use a home for cash company instead of the traditional way of selling a property. If you can spend the extra time, money, and possible inconvenience, you will be a lot better off financially.
Though you will have to spend more on closing costs and commission than will normally be the case with an investor, the traditional way of selling a home will work out better.
If you do need to sell your home in a hurry, choosing an experienced local real estate agent and pricing your home competitively could find a buyer quickly. While you can still get quotes from we buy houses for cash companies, you will likely find this is a better option.
In a strong seller’s market that we have been experiencing for many years, it is not uncommon at all to have a bidding war on your home. Don’t think for a minute that bidding wars only happen with beautiful luxury homes – that is just not the case.
When choosing a, We Buy Houses real estate investor, make sure you do plenty of due diligence. As previously mentioned, the industry is filled with scammers.
Hopefully, you now have a better understanding of how we buy houses for cash companies work. You should be in a much better place to make the best financial decision with these companies that buy houses reviews provided.
About the author: The above Real Estate information about we buy houses for cash companies was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at [email protected] or by phone at 508-625-0191. Bill has helped people move in and out of many Metrowest towns for the last 34+ years.
Are you thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!
I service Real Estate Sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge MA.