There are people who want to sell their properties fast for cash. They could be moving to a new state or country, they could have inherited property they are not particularly keen on keeping, or there may be financial challenges and there is no other choice but to sell a property to cover.
If you ever find yourself in such a situation, one option that would immediately get your property sold (with payment in cash) is a company that is in the business of buying houses. Before making the big decision to go with one, you need to be familiar with the advantages and disadvantages of doing so. Here’s a quick guide to assist you.
Pros
Simplicity
With property sales where you are your own agent or going with a formal house listing, you have to invest more money for minor renovations, spend to have your house listed, and take time cleaning up the house before taking suitable photos for online listings. You will also need to spend some time talking with the broker about the qualities of the home that could attract buyers.
Selling to a house-buying company makes life much simpler. You cut out all the preparation and just need to speak with a representative for the company buying the house.
Cash offer
A house-buying company will offer you cash up front. The entire amount goes to you, quickly and simply. You avoid having to wait for a bank to finance the buyer, and there are no real estate agent commissions to pay.
Speedy closing
The moment you contact the house-buying company, they will do an onsite inspection of the property. They will take note of repairs and renovations they will need to spend on, then compute how much they can pay you. You will not deal with banks, realtors, home inspectors, or appraisers. You will be dealing only with the house-buying company.
Usually the offer comes in fairly swiftly, seven to 10 days at most and as little as 24 hours from the time of site inspection. Companies like burlingtonhousebuyers.com even pay for your moving expenses. If you are in a hurry to sell quickly and get the cash, a house-buying company is a serious option to consider.
“As is” Acceptance
With property listings and real estate agents, the owners usually will have to cough up money for repairs and renovations in order to make the property marketable. Aside from that, even more money is needed to stage the home with furniture.
If you are in dire need of money, this will not be a viable option for you. Even when the house is already sold, the closing period can take up to 60 days and if the buyer’s financing fails to materialize, you could be back to square one. A house-buying company will assess your property “as is” and put a value to it based on its current condition.
No need to move before selling
Since the house has to be “show ready”, you will need to move out before selling it. This can pose problems for those who do not have spare funds to stay somewhere else while waiting for the house to be bought. When dealing with a house-buying company, you need to negotiate so you need not move out of the house until you close the deal and get paid.
Cons
Lower than market value
Since the house-buying company is taking a risk on your property by buying it in its present condition without a guarantee of selling it with some return on their investment, expect that they will offer to buy at a significantly lower price than market value.
Some estimates place it at 50% to 75% of your home’s market value. Usually, the goal of these companies is to buy at a huge discount, flip the house, and sell for as high as possible. On the other hand, they take on all the risks like holding costs, back taxes, renovation expenses, listing and staging costs, closing costs, and other expenses that normally you would have absorbed if you were the one selling the property.
Keep in mind that you have already saved yourself the cost of repairs as well as agent commissions, and that you get your payment in total and spot cash.
Unscrupulous companies
There are honest house-buying companies; unfortunately, there are also shady ones. Here are some schemes you need to watch out for:
- House-buying companies who agree to pay a certain cash amount for the house, then at the last minute, reduces the price
- Fee structures that are not transparent, with hidden costs
- False property valuations
- Contracts that tie the sellers with provisions that prevent them from offering the property to anyone else with a higher offer
Check the companies you are considering online to see what their credentials are. Also contact bodies such as the Association of Realtors or any other association that registers companies that buy houses.
No license needed to buy
House-buying companies buy for themselves and do not represent any buyer or seller. That means they do not need a license. Some of these house buyers are companies; others are individuals buying and flipping houses. Both types of house buyers can help you. You just need to do deeper research into the company or individuals to see if they are reliable.
Is a House-Buying Company the Right Option for Me?
Selling your property to a house-buying company is really an individual’s decision based on your personal circumstances. If you badly need to sell the property and need cash, this is a great option since you skip all the usual processes involving property sales. You get an offer and when you accept it, you get the cash.
Do your homework too in checking the company’s background. Your property deserves the best cash offer you can get from it.
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