Are Cash Buying House Companies For Real?

You may have seen in a previous post that we are now heavily into real estate. A big question across the web is what is all the hoopla with these cash buying house companies, and are they for real. First, let’s just look at why someone would consider selling their home to one of these companies.

Cost Of Selling Your House With An Agent

There are a few reasons why people would want to use a cash buying company. The cost of selling with a real estate agent is usually the biggest reason:

With any service provider their is a cost of doing business. The average expense for a realtor is 6-7% of the sales price of your home. For example if you sell your home for $200,000 it will cost you anywhere from $12,000-$14,000 at closing. If you decide to use a real estate professional to sell your property then you will more than likely be dealing with financed buyers which means you might possible have to pay seller commissions ranging anywhere from $3,000 – $5,000. Selling to a financed buyer also means once you sign a contract to purchase you will usually have to wait anywhere from 30-60 days to close.

Continue reading  “Realtors vs The We Buy Houses Cash Companies

As you can see, that’s a lot of money. It can all add up fast and take a rather large chunk of money from your available funds to purchase your next property.

Another reason people choose these companies is the speed of which they can buy your house. Many of these companies advertise that they can close on your house in 7 days or less.

There is one major drawback of selling your home to one of these companies –

 

Downside Of Using A Company That Buys Houses

The biggest problem is that you more than likely will not get as much money as if you had sold your home outright to another individual –

When you hire a real estate agent, he or she is working to make you as much money as possible from your sale. The Realtor takes a percentage of the sale price as financial compensation, so he or she is motivated to fetch the best price. If a real estate agent believes that he or she can sell your home, there is a good chance that you can make more than you would if you sell to a house flipping company. In fact, I will go out on a limb as say you are GUARANTEED to get far more money when you list your home with a real estate agent. Selling to a real estate investor will almost always end up netting you less money!

Continue reading “Pros and Cons of We Buy Houses Flipping Companies

So a realtor will most likely work much harder at getting you the absolute best price for your house, at least usually they will. Sometimes a realtor may be more interested in just getting a deal done than having your best interest in mind. It all depends on the quality of your realtor.

This video also has some great insight on realtor vs companies:

So the quick answer about these companies being for real – yes they are. However, if you don’t need to hurry and sell, then using a real estate agent will most likely bring you more money for the sale of your home.

Looking To Learn More? Check out these blogs:

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How To Sell Your House Yourself

How To Sell Your House Yourself

My husband and I recently found ourselves in a position where we needed to find a bigger home. We have a growing family and we needed more space, along with bedrooms. The problem was that money has been tight and we really needed to sell our house first to have a down payment for the next. We looked at listing with an agent and realized that we were looking at 6% of our selling price going to realtors. With what was left on the mortgage that didn’t leave us with a lot for a down payment for our next house because we have only lived in our current residence for only about 6 years. It turns out that all of those payments were only paying on the interest and hadn’t really touched the principal.

So long story short, I talked to one of my girlfriends and she had recently sold her house – without using an agent! She said it really wasn’t that difficult and I was smart enough to sell my own property as well. So I thought I’d write about my experience as well as give you some helpful info just incase you want to sell your home yourself as well. 🙂

Selling Your House By Owner

What really makes it possible to sell your house yourself is the internet. Without making use of it, you maybe stuck with your house for awhile. There were really 2 big things that we had to take into consideration – pricing the house right and the closing documents.

Pricing –

Pricing your house right is extremely important. Price it to high and you won’t have any interested buyers. Price it too low and you are leaving money on the table. Again, because of the internet this is a lot easier to do. I found some good info from  Zillow about how to price your house:

1. Look at your Zestimate — Depending on whether you feel your home’s Zestimate is as accurate and up-to-date as possible, use this figure as your starting point.

2. Update your Zestimate — Confirm your home facts on Zillow and make any edits as needed. If you have made improvements to your home, make sure those are included in your home facts. Updates to your home facts will be factored into your home’s Zestimate immediately if the change is significant enough to impact your Zestimate.

3. Use your comps — With every Zestimate, Zillow offers a set of comparables. Look these over and if you have created a good set of comps, get the average sold price from them. Your asking price should be within 10 percent of the average sold price in your neighborhood.

4. Find a “magic” price — Once you have a target in mind, think about prices that motivate people more than others. For example, if you have a target figure of $305,000 in mind, think about setting it at $299,995. This way, you will capture people who do range searching (e.g., $250,000 to $300,000) Also, there’s a proven psychology that items priced just under a “century” number are more attractive to the buyer. Think about shopping in a department store. How many times do you see prices for $9.95, $19.95, and so on? These prices have a psychological “come hither” affect — they don’t trip those thresholds of $10 or $20.

5. Find the “soft spot” — Also called “price banding,” this is the practice of looking over the inventory in your neighborhood and finding the “soft spot.” For example, look at the sale prices of homes in your neighborhood. Prices tend to get bunched up as inventory moves along. Find an empty spot so your home is separated from the pack. For example, four homes are priced in the $274,000-$276,000 range and the next set of homes start around $290,000 and up. You should take advantage of the $280,000 price band.

Read all of the article “Pricing Your House for Sale”

When pricing your home be sure and look at houses that are identical to yours, or close to it. This will ensure you are pricing your house right. Also look at homes that have recently sold – like from  6 months to a year.

Legal Documents

We decided to use an attorney to help us get our house sold. We live in a state where you have to use an attorney, and I was more than happy to do so and turn it over to her. When I started researching it online, it was enough to make my head spin. And I don’t understand all of that legal jargon either.

Much to my surprise, some states don’t require you to use an attorney. I really wonder how many of those real estate deals go bad without one. Anyhow here is some good info about using an attorney when you sell –

Purchase Agreements

The purchase agreement is the single most important document in the transaction. Although standard printed forms are useful, a lawyer is helpful in explaining the form and making changes and additions to reflect the buyer’s and the seller’s desires. There are many issues that may need to be addressed in the purchase agreement; below are some common examples:

  • If the property has been altered or there has been an addition to the property, was it done lawfully?
  • If the buyer has plans to change the property, may what is planned for the property be done lawfully?
  • What happens if a buyer has an engineer or architect inspect the property and termites, asbestos, radon, or lead-based paint is found?
  • What if the property is found to contain hazardous waste?
  • What are the legal consequences if the closing does not take place, and what happens to the down payment? This question raises related questions: Will the down payment be held in escrow by a lawyer in accordance with appropriately worded escrow instructions? How is payment to be made? Is the closing appropriately conditioned upon the buyer obtaining financing?

Most buyers finance a substantial portion of the purchase price for a home with a mortgage loan from a lending institution. The purchase agreement should contain a carefully worded provision that it is subject to the buyer’s obtaining a commitment for financing.

Read all of the article “Why You Need a Lawyer When You Buy or Sell a House”

There can be a lot going on when selling your house. I personally think that using an attorney can help save you a lot of headaches and maybe even possible lawsuits in the future.

So there you have it. Probably the most 2 important things when selling your house yourself. Thanks to the internet, you can do it yourself. It does make me wonder if high priced realtors are going to go the way of the dinosaur. Maybe not for the rich – but for the little guy – maybe.

There is a lot more, like getting the house ready itself, open houses, marketing and more, and maybe I’ll cover that in another post.  In the meantime check out some of these other articles and sites to help you sell your house yourself –

How to Sell Your House by Owner – Without a Realtor

10 Tips to Sell Your Home Fast

How To Sell Your House Fast

 

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