You’re on your way home from work and you see a sign that says “We pay cash for houses”. You have the radio on and you hear ads “We will buy your home in any condition, move when it’s convenient for you.” You think to yourself, oh wow, how easy… Here are the ins and outs of selling your home to one of these investors/companies’ vs the open market.
We Pay Cash for House Investors
“Cash for Houses” companies typically buy from distressed sellers. These are homeowners who are behind on their mortgage payments, going through a divorce or quick job transfer, or who can’t afford major repairs.
These companies pay cash, usually waive inspections, require no appraisals and will most likely handle the closing themselves. If you sell to them, you can close in a short amount of time. For a distressed seller, these quick cash for house companies can solve a large problem and get rid of a lot of stress.
However, these investors are “for profit” businesses. They are going to pay way less than market value. That is how they make money. At best, a seller will get 60%-70% on the dollar depending on the condition and the seller’s situation.
IBUYERs/Corporate Buyers
During the COVID Real Estate Boom the market was flooded with investment capital groups. These groups formed companies to purchase homes using a computer algorithm to set a fair price. These companies would request certain info (Age of house, age of roof, HVAC, public utility, etc…). They will send a representative out to the house and then make an offer to the home owner. Most of these offers are much closer to market value, but they charge fees similar to the traditional route. They take into consideration what repairs need to be done. They build that into the offer. Since the mortgage rates started to rise and home prices went through the roof, these companies have cooled off a bit.
Some of the bigger iBuyer companies include Opendoor, Zillow Offers, Offerpad, Knock and Orchard.
Traditional Route
Even if you are in a “must sell” situation, don’t rule out working the traditional route with selling a home. When you offer your home for sale on the open market, more often than not you will sell and “net” the most amount of money. If you hire the right Real Estate professional, your home will sell quickly and for top dollar in the current market. Some of the advertising you will hear from the companies who buy your home “as is” will make it sound like a hassle having people looking at your home and going through inspections. Don’t get me wrong, there could be some turbulence when selling your home. However, if you are going to keep 20K-30K in your pocket….is it worth it? The key to selling your home for the most amount of money in the shortest amount of time is putting the leverage in your corner, pricing it accordingly and marketing it to the masses. If you are thinking about selling your home, check out our program at jroyandassociates.com/selling
Credit: HouseoPedia
Justin Roy
JRoy and Associates-Fathom Realty
Jroyandassociates.com
248-328-5080.