Did you know that, in 2022, nearly a third of all US homes were purchased with cash? Cash offers are becoming increasingly popular as homeowners look for unique ways to engage in a fast home sale.
Is that you? Are you considering selling your home but don't want to go through the hassle of a long, drawn-out process? We Buy Houses affiliates offer an innovative solution that allows you to sell your property quickly and efficiently.
And while they streamline the sales process, it doesn’t mean they’re the right option for every homeowner. Follow along as we look at what you should expect when working with a “We Buy Ugly Houses” affiliate in your area.
You've likely seen their signs around town, but what is "We Buy Houses?" Is it one company operating nationwide, or are "We Buy Ugly Houses" separate companies? Simply put, "We Buy Houses" companies specialize in buying properties "as is" for cash. There is a brand called "We Buy Houses," but other similar companies have also popped up over the years.
This selling model can be an attractive option for homeowners who find themselves in time-sensitive or urgent situations, such as needing to move a family member into a care facility or grieving the death of a family member. With "We Buy Houses" companies, there's no need to make upgrades or repairs since they will buy the home as is.
This also eliminates the need to go through the often stressful and lengthy home-selling process. Sounds great, right? In most cases, it's a great option if you need to sell your home fast and are willing to accept lower than the market value for it. However, if you have time to sell your home the traditional way, you can sometimes get more.
Overall, it's important to research these companies and understand the pros and cons before deciding whether selling your house to one is your best option.
We just threw a lot at you, we know. So, let's start with the basics. What is a cash offer, and how does it differ from a formal offer to buy a home? A cash offer on a home is when a potential buyer offers to purchase the house for cash.
This can be an attractive option for sellers, as cash transactions are usually quicker and require fewer steps than getting the money from a mortgage loan or other financing. Cash offers may also have advantages over financing deals in competitive markets since buyers don’t need home inspections or loan approval to purchase.
This means a quicker sale for you as a homeowner and faster access to cash since it doesn't have to sit in escrow.
As mentioned above, working with "We Buy Houses" companies can be beneficial. However, we don't recommend selling your home to one immediately. Instead, understand the process, fees, and implications of selling your home to an affiliate like this.
How does a cash offer work with "We Buy Houses" companies? They can offer cash without needing to wait for financing, allowing you to get cash offers within days (or sometimes even immediately).
To receive a cash offer on your home, contact the company and provide them with information about the house. This includes information such as the location, condition, size, etc. Based on this information, they will offer a cash purchase price you can accept or reject.
Where do they come up with the value of your home without seeing or inspecting it? They use web platforms incorporating automated valuation models (AVMs) to facilitate a streamlined and efficient process. They'll compare the size and condition of your home to similar real estate prices in the local market. This means the offer might not always be the best (or accurate).
If you accept the offer, you can arrange to close as soon as possible so that cash is in your pocket quickly. If you don't accept the offer, there's not much you can do. In most cases, they don't allow you to make improvements or repairs to increase the value of your home.
Too often, hidden fees are added on by cash buyers that can drastically lower the sale price. Not only do “We Buy Houses” businesses have hidden fees, but so do iBuyers — with service fees usually taking 6% to 15% of the purchase price.
To avoid having hidden fees impact your final sale price, the most important thing you can do is read the fine print and ensure you understand all terms and conditions associated with any cash offer. Factor in the costs of service fees or even attorney fees (if applicable). Consider the total of these costs when determining whether to accept the cash offer or not.
As mentioned above, you're not likely going to get a cash offer for 100% of the market value of your home. What kind of percentage are we talking about here, though? Cash buyers generally offer the market value of your home at no more than 70% of the after-rehab value.
This means that they aim to purchase homes for incredibly low prices. This is understandable on one hand as they'll need to make repairs and upgrades to flip the house and sell it for more. However, it doesn't mean it's fair to you as a seller.
With no legal obligation to provide sellers with a desirable price or to consider their best interests, cash buyers are known to only look out for their monetary gains. It would be best if you did the same.
What if you want to learn how to sell your house fast but don't want to offer it to a cash buyer for much less than it's worth? You've got other options.
First, ensure your house looks neat and presentable both inside and out by decluttering, doing repairs, and taking care of landscaping. Next, create good marketing material such as brochures or flyers pictured with your home looking its best. Finally, take advantage of all the online options for selling your home quickly by posting ads or listing it on real estate websites.
All the tips mentioned above can ensure a fast home sale without working with "We Buy Houses" companies. However, the best way to sell your home quickly is to stay updated on market news and changes. Click here to read through our Market Watch articles to stay informed.