Are Cash-for-Houses Companies a Scam?
Are you worried about foreclosure? Do you want to sell a house that needs work? Are you looking to sell your house fast because you need to move unexpectedly? Regardless of your reason for needing to sell your home, you may have considered working with a cash-for-houses company.
Perhaps you’ve done a little research on cash home buyers and read they’re all a huge scam. But is that really true, or is it simply propaganda from real estate agents who are looking to take home a hefty commission?
We’re here to fill you in on the truth. Below, our home-buying experts at Purple Mountain Holdings explain what you need to know about selling your house to a cash-for-houses company.
What Exactly Is a Cash-for-Houses Company?
A cash-for-houses company is exactly what it sounds like: home buyers who are willing to purchase houses for cold, hard cash. Typically, these types of buyers are real estate investors, which means they have a strong grasp of real estate trends and other factors that can affect the overall value of homes.
In many circles, cash home buyers are referred to as “opportunity investors” because they tend to work with distressed homeowners who are looking to sell quickly. However, what they actually do is give homeowners who are in a pinch an opportunity to get out from under a property quickly by avoiding the traditional real estate process altogether.
Rather than going through the process of inspections, repairs, showings, negotiations, escrow, and closing, cash-for-houses companies eliminate all but the most critical steps in the home-buying process. Since they pay cash, there’s no financing involved, which allows the sale to move much more rapidly than it would with a traditional agent and a lender.
Cash home buyers can purchase properties in any condition, whether a property needs extensive repairs or is nearly brand new. They can also help homeowners avoid foreclosure since they’ll work with mortgage lenders to arrive at a purchase figure that satisfies all parties.
The Cash for Houses Process: 6 Simple Steps
So how do cash home buyers work? Do they buy houses for ridiculously low prices since the owners are in distress? No. Cash-for-houses companies pay fair market value for properties.
Their final offer price is based on a number of factors that can affect the overall value of the home, including the projected cost of any necessary repairs, the layout of the house, its size, the value of other homes in the neighborhood, and the current real estate market.
If you choose to work with a cash for houses company, here’s how the process works:
- You contact the cash home buyer. You reach out to the cash home buyer with some basic information about the house you need to sell.
- The buyer conducts a walkthrough of your property. The buyer reaches out to discuss your property and your goals for the sale. If you’re ready to get a fair cash offer, the buyer will schedule a time to perform a walkthrough of your house to determine its condition and value.
- The buyer builds a fair cash offer. After completing the walkthrough, the buyer will build a no-obligation, fair cash offer for your house in its current condition. You’ll have time to review the offer to decide whether it meets your needs.
- You decide whether you want to accept the offer. If you like the offer, you can accept it and move forward with the sale. If you don’t love the offer, you can just as easily choose to decline it.
- You and the buyer determine a closing date. If you choose to accept the offer, you can proceed with the sale immediately and schedule a closing date. If you need some time to arrange your move, you can discuss your needs with the buyer, and both of you will arrive at a suitable closing date.
- You close on the sale and get your cash. You and the buyer will close at a local title office, you’ll get your cash, and the deal will be complete.
With a reputable cash home buyer, the process is straightforward, transparent, and most definitely not a scam. However, you should be aware that if your house requires work, you may not get the full offer you’re looking for. Since cash buyers factor in the projected cost of fixing the place up, they must subtract those expenses from the home’s value.
It’s also important to note that there are certainly shady cash buyers out there, so it’s critical that you do your research before working with a company. It may benefit you to seek offers from multiple buyers to determine whether they’re in line with one another. That way, you’ll know if you’re getting low-balled.
Need to Sell Your House Fast?
If you need to sell your house fast for any reason, let our team at Purple Mountain Holdings help. We buy houses in any condition for cash and can complete your sale in a matter of days. To learn more or get started, submit your information to request a fair cash offer, or call our Colorado Springs office today at (719) 476-2727.