You’ve seen it before on various forms of advertising. You’ve seen on billboards, TV, and even on social media, like YouTube, where people/organizations are advertising “We Buy Houses” signs. With this type of business, many consumers wonder whether or not these types of real estate businesses are real, and the answer is yes. However, as with most businesses, some are legit, and some are not. And thus, you must do your due diligence to ensure you hire the right company for you.
How This Business Works
These people/organizations are known as cash buyers and opportunity investors. They pay cash for homes to people who are in financial distress and need to sell their homes quickly. They usually search for the following types of sellers:
- People who are divorcing
- Homes in probate
- People in bankruptcy
- People who have expired listings or who can’t sell
- Houses in foreclosure
- Owners evicting tenants
- Vacant homes
- Damaged or trashed homes
These cash buyers may offer to close the property within 30 days or so since they don’t have to arrange for financing. Also, these organizations will inform you that you won’t pay any real estate commissions, but sellers will get more most of the time if they hire a listing agent. However, the seller does almost immediately receive cash in hand by going this route instead of going through a real estate agent because they do not have to wait on the buyer’s financial institution.
When it comes to payment, these companies negotiate the possible lowest price for your home. It will be on average around 65% of the fair market value of your home. Furthermore, they will sometimes take over your mortgage payments by taking title of your existing loan. Otherwise, you will still be on the hook to pay off the loan. After the cash buyer takes over the home, they will resell it at a higher sales price after closing to a conventional buyer.
The Pros & Cons of This Business
As mentioned before, there are various pros and cons of home selling to these companies, and they are as follows:
- It’s easy.
- There’s only one decision for you to make.
- You’ll get a quick sale.
- You are more likely to sell regardless of the condition of the home.
- You’ll may make less money than working with a realtor.
- You’ll have no option to improve the selling price.
- You’ll give up control.
As with all types of organizations, there are advantages and disadvantages. So, you have to take into consideration whether or not hiring a cash buyer or a realtor is right for you and your situation. And if you decide to hire a cash buyer, you must find a legitimate cash buyer for you. There are ways to check these companies’ credentials online, through the Better Business Bureau, through consumer reports, through customers’ testimonials, and more. Doing this will take you a long way in making the best in hiring a cash buyer for your home.