In the past couple of years, we’ve seen several new “We Buy Any House” or “We Buy Houses” companies popping up across the US with an alluring offer of paying cash for a home. As it turns out, many homeowners who want to sell in a hurry find these types of offers attractive. However, there is a bit of scepticism surrounding these companies with many people not sure if they are legit. Afterall nobody wants to end up getting scammed.
In this article, we’ll look at what these so-called cash for home companies are all about and if you should sell to them.
What is a ‘We Buy Houses Company’?
We buy houses, or homes companies as they are often referred to are a lot like those companies that make a cash offer for your car. However, instead of a vehicle, these companies will make a cash offer for your home. While on the surface, things may be as simple as this, but there is a little more to it. After all, you don’t expect a company to pay upwards for $100,000 for a home without asking a few questions or without the prospect of turning a profit.
Now before we go any further, it is essential to elaborate that there are two types of ‘We Buy Houses’ Companies:
- The first will buy a home directly using their cash reserves
- The second will often have a 3rd party source of the cash or an investor
Interestingly, it shouldn’t matter to you what type of company you are dealing with as long as they are legit. In most cases, these companies are legit, but you wouldn’t want to sell without conducting thorough due diligence.
Why Would a Homeowner Sell to a ‘We Buy Houses for Cash’ Company?
Generally, most people will consider selling to a company like this as a last resort or if they are in a hurry to get it off their shoulders. Usually, it is people who need a quick injection of cash for perhaps a medical emergency or if they need to move ASAP. Regular channels for selling like via a real estate broker can take weeks if not months, so not everyone has the time to take that route.
Homeowners will also consider selling to a company for cash if they don’t have the money to invest in renovations. Many people may not have the funds needed to fix things like the roof, get the house painted and replace the garage door to make the home more appealing. However, the willingness to sell will mean that they will accept around 90% of the market value says Israel Ramirez ; the founder of We Buy Houses Arizona – AZ Home Offer.
While it is possible to negotiate a price in often hot markets, the company will not budge much, so the first offer is often as good as it gets. That being said, it is essential to determine the market value of your property first before choosing to contact one of these companies.
Are These Companies Safe?
We aren’t going to categorize all companies as safe, but it is worth considering the following:
- The ‘We Buy Houses” market isn’t regulated, which means that as a seller or even the buyer for that matter isn’t protected. The National Association of Property Buyers (NAPB) requires all such companies to be registered with The Property Ombudsman (TPOS), which means that they need to adhere to its code of practice. If the company you choose to sell to is a NAPB member and the deal goes south for some reason, you can contact the association which as it turns out are very helpful.
- Many people have successfully sold their homes to these companies and were more than satisfied with the experience.
- You need to realize that like with traditional high-street estate agents; there are some good businesses and some not exactly trustworthy ones. That’s why it pays to do your due diligence.
Pros and Cons of Selling to These companies
As a homeowner, we strongly suggest that you consider the pros and cons of choosing to sell to a similar company. We’ve listed some of the pros and cons below which should help you decide either way.
- It is simple – Selling a home isn’t a challenge anymore when you choose to sell to these companies. They will take a look at your property, make an offer and often pay before the weekends.
- You make a single decision – As a homeowner, you only need to decide if you want to sell or not. You don’t have to consider any repairs like you otherwise would. When the company makes you an offer, you can either say “yes” or “no” to it.
- No Realtor Involved – Involving a realtor can be a hassle mainly because not all of them are professional. So, you’d need to interview quite a few before you find the right one. When you choose to sell for cash, there is no need to involve a realtor, so that saves you a lot of time and effort.
- Avoid the challenge of sale by owner – Trying to sell your own home can be immensely challenging. You would probably consider this route especially since realtors often charge a hefty commission. Though if you decide to take the ‘sale by owner’ route, you need to have good marketing skills, excellent photography skill, you need to be available to show the property and have excellent negotiation skills.
- You will sell for less – As compared to going the traditional route, selling to a company means selling for as low as 30% under market value.
- Limited room to negotiate – Most ‘we buy houses’ companies aren’t open to negotiation like individual buyers that come through a realtor or an ad in the newspaper.
As a homeowner, you need to decide how to sell the home. ‘We buy houses’ companies are certainly an option worth considering, especially if you are in a hurry. That being said, it is we stress that sellers do their due diligence regardless of how they end up deciding to sell a home.