When looking to sell quickly, sellers might find themselves curious about those companies advertising that they’ll buy your house for cash, and wondering if it’s “real.” Wondering if it’s a good idea to sell this way, especially as you’re looking to sell quickly?
How to Spot an Opportunity Investor
These companies, called opportunity investors, are looking for sellers who are desperate to sell immediately with the promise of instant cash. These sellers could be bankrupt, going through a divorce, in foreclosure, or having a hard time finding buyers. Many times these buyers will advertise without a company name, only listing a phone number with a message that says, “We’ll buy your house for cash!” or “We buy ugly houses!”
Because they can avoid financing, opportunity investors usually offer to wrap up a sale within 30 days. They will persuade sellers by offering cash and usually pass on inspections, making the entire process seem easy as can be. For homeowners who might be feeling frantic and are determined to sell fast, these opportunity investors might come off as lifesavers.
The Good News: Fast Cash in a Bind
If you are desperate for quick money and a hassle-free experience, an opportunity investor can offer it. If you’ve been waiting for an offer from your real estate agent and can’t wait any longer, the option to sell to an opportunity investor is appealing.
Working with a fast cash buyer will also be almost 100% effortless, and you won’t have to deal with fixing up your home to sell.
However, these are about the only upside to selling through a we-buy-homes-fast company, because you’re still getting a lot less money.
The Bad News: You’re Not Getting the Best Deal
Hiring an agent will almost always get you more money because agents can sell a home for more than its fair market value. Sellers won’t find themselves getting more than fair market value from a fast-cash company offering to turn the deal around quickly. Opportunity investors will typically only offer the seller about 65% of the home’s value.
Home buying companies rush the selling process because longer closing processes cut into their profits. They offer quick cash up front for a low percentage of your home’s value because the less they give buyers, the bigger their bottom line.
Think of a cash buying experience similar to trading in your old car when buying a new one. You usually aren’t getting a good deal on your trade-in because the dealer is offering the least amount possible. But, you get to walk away without having to fix it up or deal with the hassle of selling it and the dealer gets to flip it for a larger profit.
It’s important to note that traditional buyers might still offer cash. If this is important to you, be sure to work with an agent to help find the right buyer.
Do a Thorough Review
Most opportunity investment companies will lure sellers in with the promise of avoiding paying real estate commissions. They’re doing this to avoid conflict of interest or a lawsuit. Home buying companies are ripping off the seller in the first place, and they know that charging a commission on top of this will only shine a light on their risky business model.
Before considering an offer from an opportunity investment company, do your homework through the Better Business Bureau and other online review sources. Ask friends who may have used a home buying company about their experience. You’ll find that 90% of sellers end up turning down their offers from opportunity investors because of shady business practices and low-value offers.
If You Want to Sell for the Highest Amount, Hire a Realtor
The best option for sellers looking to make the most profit is always going to be to hire an experienced real estate agent. Clever Partner Agents are pros at selling quickly — and can help sellers save thousands by offering a significantly reduced commission rate.
Some options for sellers looking to save money include hiring a flat-fee realtor, or looking for discount agents who will list homes on an MLS, but offer no additional service to shave costs to the seller.
Though hiring an agent may take longer than the immediate transaction with a home buying company, or seemingly cost more, the seller will always walk away with more money from the sale this way.