You just came into a home. You were not preparing for it or even suspecting it; then a lawyer informed you that your long lost uncle died, you abruptly found yourself the owner of a home on the other side of the country. Anxious to cash in on your blessing but reluctant to go and fix up a home in uncertain conditions, your initial stop is Google. Your search “companies that buy houses for cash” and are instantly overwhelmed with results.
After searching a few choices, you fill out a form and get a call within minutes. Once you explain the circumstance, the person on the phone guarantees you his company can take care of everything—repairs, cleaning, appraisals, etc.—and will just send you a check within the week. Sounds perfect!
As promised, a week after confirming and faxing some papers, you obtain a check for $65,000. Two weeks later, on a whim, you choose to check to see if the house is registered yet and find, to your horror, that the home is registered for $110,000.
You ask a real estate attorney, and after she evaluates the papers you signed, you discovered there is nothing you can do. What happened?
You have probably seen ads on telephone poles or freeway underpasses from companies that buy houses for cash. Online services that attempt to buy your home for money are necessarily the equivalent thing with a combined digital layer of uncertainty.
Drawing in retailers with catchwords like “We Buy Ugly Houses,” real estate investors behind these services are in the business of flipping homes and buying them for a profit. These investors essentially serve sellers looking to unload the property quickly for cash on the nail.
Real estate investors that attempt to buy homes quickly for cash normally provide around 65% – 85% of a home’s value. An excellent real estate agent, on the other hand, can take more than 125% of a home’s appraised value.
Several sellers realize they are getting less than market value when marketing quickly for cash, but few know that between an investor’s cut and a legitimate agent’s added benefit, they could probably make more than twice as much for their home. That is a huge 60% difference in what a ‘sell your home for cash’ site would provide you versus what a prime real estate agent could make.
Fast and Easy Comes at a Price in Speedy Cash Home Sales
A principal reason home sellers go with a cash real estate service, beyond the speed of sale, is if they have a rundown or messy home – something that might need work or cash before listing. Dynamic marketing and sales on the part of investors may push traders into signing over their home fast, turned off by the ticket price or work their home may require.
Companies that buy houses for cash bill themselves as a speedy, hassle-free alternative real estate agent. While this may require a seller some cash upfront, financing options are possible for these fixes, and in the long run, you will get more on the sale of your house. What is more, you will have the reassurance that you are working with an expert, compelled by-laws, and rules.
Look Out for Scams in the Companies that Buy Houses for Cash
People looking to empty real estate for quick cash simply draw scammers. While several of these companies that buy houses for cash operate absolutely legal and above-board services, others see possibility in desperation. Behind a steep cut in the selling price, you stand to lose much more from opting for a swift cash sale.
One of the more popular scams is a contract bait and switch. In this scam, a client may tell you they plan just to write up a verbal agreement you reached and preferably offer a drastically modified written agreement. Among a subset of traders looking to close suddenly with little hassle, signing contracts without reading them thoroughly is more common and can lead to critical problems down the road.
Ownership, sale price, and mortgage terms can all be modified in a way to leave a trader holding the bag.
But perhaps the gravest scam sellers may run into is property skimming. Desperate or unbiased sellers are unusually vulnerable to this scam, in which someone obtains the title to your home, refinances it without your information, takes the ownership, and walks away. What creates this scam particularly dangerous is that victims may have never set foot in a residence, but are now on the bill for a home with no equity and possible foreclosure indications.
If you are going to sell your house for money, make sure you do your due attention to the clients. Ideally, get a committed third party to confirm the legitimacy of the proposal.
You have Got Options if You Want to Sell Your House for Cash
Let us try that opening scenario over:
This time, after you get off the telephone with your uncle’s estate attorney, you call a qualified neighborhood real estate agent first instead of asking Google. The agent attempts to scout out the property, providing recommendations and appraisal for your business.
A few days after, the agent informs you the house requires significant cleanup and a couple of repairs, but not to worry, these can be managed on her end without expecting you to fly across the country. All told, your expenses should total around $1,500, with $500 for an appraisal. The agent again convinces you this is a tiny price to pay because other homes in the area have sold lately for as much as $150,000.
Balking at the idea of paying $2,000 on a place you never needed in the first place, you now choose to consult with a real estate investment offering to buy the residence now for cash. The investor who calls you provides you $65,000, but this time you’ve done your research. You soon realize that $2,000 is little compared to the tens of thousands more you stand to make a listing with the agent.
Final Thoughts
At the very least, having a real estate expert costs you nothing and could bring you thousands of dollars on your sale. While companies that buy houses for cash propose a seemingly ideal service for individual sellers, they are normally only the best option in specific situations. Operating with a qualified real estate agent may take added time and may even cost you money upfront, but you stand to get more money and face less risk from the sale of your home in the long run.