Unless you’ve been living under a rock for the past 20-30 years, you probably have seen at least one advertiser stating they’ll buy your home. In some neighborhoods, “WE BUY HOUSES FOR CASH” signs can be found around every corner. Most people take them at a glace and just walk on by, but let’s face it, it’s a pretty striking concept.
Did you ever wonder what these companies do with the houses they buy? Or maybe, you have been thinking about selling a house for cash after seeing all the hassle that your realtor has been putting you through. It’s normal to be just a little curious.
The house-buying spree is happening in every neighborhood, in every state of the USA. So, what’s the deal with companies that buy houses? Let’s find out.
What Do House Buying Companies Do?
Well, they buy houses. More specifically, house buying companies actively work to buy up houses for resale, flipping, or real estate investment purposes. They try to offer less cash than what would typically be accepted on market value.
Unlike regular home buyers, these Equity Purchasing Companies (or “opportunity buyers”) focus on homes and sellers that are in specific situations. These situations include:
- Homes being foreclosed upon
- Homeowners who are desperate to get their house off the market
- Homes that are deemed unsellable by typical standards
- Sellers whose employers transferred them
- Abandoned or vacant homes
- Homes on probate/Inherited homes
- Flippers who failed
Get the drift? Basically, opportunity investors look for people who are trying to move fast. Because they’re paying cash, they’re able to make the home purchase process faster than ever, which makes them a solid choice for people who need to move and want fast cash.
Will You Get Market Rate for Your Home?
Casual investors or single entities do not run the majority of EPCs. Instead, they’re run by professional real estate investing teams that often employ high-tech tools to determine what the price of the house needs to be in order to minimize their risk of loss.
Companies that buy houses for cash, therefore, aren’t going to give you full price or market price. They’ll give you a price that’s slightly below what you would typically get. Most companies will offer around 65-75 percent of the market rate.
If you were hoping for a market price or need all the money that you can get, this option isn’t for you.
No Fees, No Commissions
If you are looking to sell your home, EPCs will typically point out the perks of selling your home to their company. The most common perk they’ll tell you is that you won’t have to pay any fees or commissions to get your house sold. Sounds attractive, right?
Well, yes and no. In most cases, hiring a real estate agent and getting your home listed will still net you a higher price—even when you take the commissions and fees into account. However, if your home is in great disrepair or is located in an area with very low demand, it may make sense to just sell to an EPC.
What If I Owe Money On My Mortgage?
One of the first things that an EPC representative will ask you is if you owe money on your mortgage—and if so, how much you owe. Believe it or not, you can still sell your home to them. However, you probably won’t want to get the price they’re offering.
Upon hearing that you owe money, they usually will only offer the amount that you owe on your mortgage. They won’t offer more, no matter how nicely kept your home is. That’s the way it is with these things.
Cash for houses: how does the process work?
If you choose to give one of these companies a call, you should know what to expect. Here’s the scoop:
- You will reach out to them and ask about an offer- They will ask you questions about your house, the situation you’re in, and what you owe on it. This gives them a good estimate of what they could offer you.
- They will set up an appointment to come to your home- Most companies will do what they can to make sure that it works with your schedule.
- When they get to the appointment, they will take notes of your house’s quality, and give you an offer- Some companies might be open to giving you an estimate at your first appointment, while others will do it over the phone after the appointment is made.
- You might be able to haggle- Some companies are open to letting you make a counteroffer, but most won’t.
- If you decide to go through with the sale, the company will schedule a time for you to transfer the deed to the house- They will give you the paperwork and a check for your money. Upon signing, you’ll have the cash in your hand and will be able to move out of your home.
Tips for Getting Good Offers on Your Home
Even though you’re not dealing with the full realtor experience, it’s essential to exercise a little bit of caution when you’re working on selling your home. These three tips can make a world of difference when it comes to your outcome:
- Research every company that you approach- Scams can and do happen in this industry. The more due diligence you make, the better your results will be, and the less likely it is that you’ll be a victim.
- Look at alternatives first- Companies that buy houses should not be your go-to unless you absolutely can’t sell it any other way. Hiring a realtor might be a better option, as would working with an iBuyer platform.
- Approach at least three companies before you make a decision- You don’t want to agree to a lowball offer. To avoid getting a ridiculously low offer, the best thing you can do is to ask around and pick the best offer you get.
- Ask questions- This is not the same process as getting a realtor, so the terms of your sale will be different. Are you expected to move out before it’s done? Are you going to have to pay off your mortgage using your own money? These things matter and each company will have different policies. Asking questions is your best way to figure things out.
Are House Buying Companies Scams?
A lot of people assume that home buying companies are scams, especially if they heard horror stories about them. Truth be told, the majority of opportunity investors are legitimate companies that are there to serve a particular need. For many people, they are the last resort they need—and that is OKAY.
Most of the “horror stories” involving home buying companies are actually just stories of people who accepted a lowball offer or felt rushed. Some might also have felt pressured. Getting a lowball offer is not fun, but it also doesn’t mean you’re being scammed. It’s just par the course when it comes to dealing with cash for homes companies- you have to expect an offer that is below the fair market value of your property.
When to Get Worried
However, there are some individuals that claim to buy houses for cash that aren’t legitimate. If you notice any of these signs in a company that you’ve called, choose a different company immediately:
- They refuse to name their company, won’t tell you the names of the representatives, or use a fake number- You should never do business with a company that won’t tell you who they are until you agree to book an appointment. They could be casing out your house!
- They discuss fees for your home sale- No honest company will try to charge you fees to sell your home at a discount. This is the true mark of a scam company.
- You can’t find any information about their company online- This is a glaring red flag and suggests that you’re not working with a real company at all.
- They refuse to offer any proof of funds- How are they going to buy your house if they don’t have the funds? It’s totally reasonable to ask for proof of their ability to afford things. Don’t take no for an answer here.
- You searched up the owner’s name or representative’s name, only to discover they don’t exist or that they’ve been in trouble with the law- This suggests that they could be dealing with a fraudulent company or with people who are trying to defraud you.
Companies that buy houses reviews
Let’s say that you’re deep underwater with your house and that you need to be able to sell your house fast. It happens, and when it does, it makes sense to work with a home buying group that has a sterling reputation. The cash for homes companies below have gained excellent clout as quality groups to work with.
We Buy Ugly Houses
Perhaps one of the longest-running businesses to be established in this industry, We Buy Ugly Houses has helped over 75,000 people get cash for their homes. Their payouts are good, they have more than 20 years of experience, and their customer service is excellent. They buy houses without any questions asked—a big relief for people who are dealing with some heavy issues.
New Western Acquisitions
Though this once was a relative newbie to the field, this company’s popularity grew exponentially thanks to their transparent service and the way they conduct business. Decent payouts, a lightning-fast process, and honest estimates are what made them become the nationwide phenomenon they are now.
Are you completely and utterly in need of a rushed close? If so, you might want to check out internet-based iBuyHomes. This company is known for being able to close a house sale in a very impressive 36 hours. You even get to pick your own closing date!
Fast Made Offers
If you’re open to waiting for a week and change, then you might want to check out Fast Made Offers. This international company can close sales within nine days. In some situations, they can even offer up a same-day close. Since they’re global, you can also sell properties abroad through them.
Networth Realty isn’t just an opportunity investor group; it’s a full-service realty as well. So, if you aren’t sure whether you want to just have a quick sale or want to go through a realtor, Networth Realty can help you out either way. We strongly suggest it as a go-to.
Is Using A Home-Buying Company Right For You?
Every single home sales situation is different, so there’s no clear-cut answer to this question. It all depends on what you’re looking to accomplish, aside from selling the house. If you aren’t sure, ask yourself these questions:
- Is time more valuable than money? It takes, on average, 68 days to sell a house for a realtor. Can you wait that long? If so, opt for a realtor. You’ll get more money.
- Are you able to stand firm when you are not interested? Many companies are known for having aggressive tactics. If you are not good with saying no or are likely to be browbeaten into accepting less, you shouldn’t work with EPCs unless it’s absolutely necessary?
- Have you checked other alternatives? Realtors aside, you might also get a good turnout from renting your house out or trying an iBuyer platform. If you haven’t checked out alternatives to EPCs, do so before you sign on the dotted line.
If you were curious about all those “WE BUY HOMES” signs you’ve seen, you now know the scoop. Yes, they’re real businesses that buy up houses at any quality. Yes, they do let you sell your house fast—though it’s often at a gross discount. And yes, it could potentially be the right option for you.
However, this is a matter that depends on your unique situation. Working with an EPC is something that only is beneficial in very specific circumstances where time is more of an issue than money is. If you’re in need, EPCs can be there to help you as long as you do your due diligence.