Nowadays, it takes 71 days to finalize the home selling process in the USA. This includes listing and marketing the property, price negotiations, and completing the closing process.
To see the process through, you’ll need to pay the agent’s commission, legal fees, closing fees, and holding costs. What if you can’t afford to wait that long? What if you can’t find a buyer for your dilapidated home?
Is the bank breathing down your neck due to missed mortgage payments? All these factors make the prospect of engaging with a company that buys houses for cash an attractive proposition.
Keep reading to find out how this works and whether it could benefit you.
Who Buys Houses for Cash?
If you’ve been Googling, ‘How to sell my house fast for cash?’ for the longest time, you’ve likely come across an abundance of companies to help you do just that.
There are four main types of companies that advertise, ‘we buy houses for cash’. These businesses don’t pay top dollar for properties. Ordinarily, they only offer around 70% of your home’s value after repairs, and then they minus the cost to repair it.
That said, companies that buy houses for cash can offer workable solutions for home sellers who:
- Are facing foreclosure
- Have inherited an unwanted home
- Must relocate in a hurry
- Own a run-down home in need of major repairs
You can work with one of four different types of cash for houses companies if you want to sell your home faster than the average home seller. These are:
These ‘we buy houses’ companies buy homes in up-and-coming or popular neighborhoods, complete the repairs, and then rent them out afterward.
In some instances, these investors must arrange finance for the sale before they can hand over the money. This can delay the deal a little.
If you watch HGTV, you’re familiar with this business model. Fix-and-flip investors specialize in purchasing homes as-is and then renovating them with a view to selling them at a profit.
To profit from these arrangements, the buyer must complete the repairs within six months. If they can’t complete the repairs on your home in time, they might decide against buying it.
iBuyers are the new kids on the block when it comes to buying homes for cash. They work with large investors, so they can pay for homes fast and offer slightly higher offers.
Since they pay more for homes, iBuyers only buy homes in relatively good condition, so they can rent or sell them quickly.
Franchise Cash Buyers
We’ve all seen advertisements and flyers for these major operators. Franchisors work with local cash home buying companies in most cities and towns.
These franchises have ongoing relationships with local contractors to ensure speedy and cost-effective home repairs. Their offers vary widely according to circumstances.
The benefit of working with a franchise is that they enforce a strict code of conduct on their franchisees and ensure they stick to it.
How Does the Process Work?
Most companies that pay cash for houses have a website where you can enter your home’s details. Alternatively, you can call or email them to discuss the sale.
They usually make a preliminary offer within minutes or days, based on the size and location of your house. Some of them may ask you to provide a video walk-through of your home, so they can make a more precise offer upfront.
After that, they’ll arrange to inspect your property. At this time, they’ll likely decrease their offer based on their estimation of how much it’s going to cost them to repair and sell your house.
You can think about this final offer for a few days, or accept it on the spot. The last step is signing the agreement and agreeing to a closing date. Some companies can pay you within seven days.
Others will allow you to rent the home from them until you find an alternative.
Go here, for more details on what’s involved in this process. Traditional Sales vs Cash Home Sales
When you sell to a company that buys houses for cash, you’re going to receive below market value for your home. Yet, it’s important to keep in mind what you really get for your house when you work with a realtor to sell your property.
Realtor commission is around 5% of the value of your home. Then you should deduct the cost of repairs and a home inspection to get your home in a salable condition.
You also need to deduct closing costs from the amount you receive for your home.
Finally, how much is your time worth? Repairs, marketing your property, and negotiating with the buyer all take time. Then, if they don’t achieve the finance they need, you’ll need to start most of this process over again.
Many lenders won’t agree to mortgage a run-down property, so there’s that factor to consider, too.
When you work with a cash home buying company, you cut out all the time and expenses involved in selling your home the conventional way. For many, this makes up for the losses incurred in the process.
If you decide to work with a company that buys houses for cash, it’s vital to ensure you’re engaging with a reputable, licensed business. Reading this article is a good start, but you must also read reviews and look into the company’s history before you agree to anything.
When you find the right one, ‘we buy houses’ companies can offer a lifeline for struggling homeowners, who simply want a fresh start.
Would you like to fix and flip your run-down home yourself? Browse our blog for the best home improvement tips and advice.