🔑 Key takeaways:
The infamous "We Buy Ugly Houses" moniker is the trademark of Homevestors, or, as they're sometimes referred to, "The We Buy Ugly Houses People."
Like other companies that buy houses for cash, We Buy Ugly Houses buys ugly houses by making all cash offers — sometimes as little as 50% of the home's fair market value. They can close quickly, but the company doesn't pay as much as most home sellers would get on the open market.
The company defines "ugly houses" broadly, and includes conditions like:
- Structural issues
- High-crime neighborhoods
- Flood plain or weather prone areas
- Houses with high-interest rates or undesirable financing
- Inherited houses
- Divorced homeowners
- Houses that are too big or too small for the homeowner
Basically, "ugly house" buyers look for problem houses that represent an investment opportunity. Properties like these are usually sold by people who want to cash out quickly and are willing to take a discount on the price.
If you want to get the most possible value for your home, you should weigh all of your options before selling to We Buy Ugly Houses. Read the rest of our We Buy Ugly Homes review to learn more about how it works.
Pros & Cons of selling to We Buy Ugly Houses
How does We Buy Ugly Houses work?
When a We Buy Ugly Houses franchisee visits your home, they'll evaluate its value based on factors that include:
- The current real estate market conditions
- Comparisons to other local sales
- The home's age and overall condition
- Estimated repair costs
How much does We Buy Ugly Houses pay?
Since We Buy Ugly Houses is in the business of making a profit, they'll only pay a percentage of your home's after repair value (AVR).
According to one source, We Buy Ugly Houses franchisees aim to pay only 55-65% of a home's after repair value. This means that while the information the company uses to analyze your home's value may be accurate, the offer you receive is still a discounted one.
Getting an offer from We Buy Ugly Houses
Home sellers can request an offer from We Buy Ugly Houses by completing the online form or calling their 1-800 number.
After the details have been confirmed, your local We Buy Ugly Houses franchisee will schedule a time to come and see your house, either virtually or in-person.
Once the inspection is complete, the homeowner will get a firm all-cash offer from We Buy Ugly Houses. Unlike a traditional sale which usually involves contingencies so that the buyer can secure financing, there's no risk that the deal will fall through because the buyer (We Buy Ugly Houses) couldn't get a loan.
It can take between 24-48 hours to receive your offer, but in some cases the offer can be made immediately.
If you accept the offer, you can pick a closing date and We Buy Ugly Houses will take care of the details. You can close in as little as three weeks, or more if you need extra time.
Why the franchise model matters to home sellers
Owners of We Buy Ugly Houses franchises have to pay 0.8-3% per transaction to Homevestors, giving them even less margin for profit when they buy a house.
This additional cost means that they're incentivised to buy your home for the lowest possible price in order to keep their costs down. For example, if the franchisee knows they have to pay 3% to We Buy Ugly Houses with each purchase, they'll incur a $6,000 fee on a $200,000 house, but only a $3,000 fee on a $100,000 house.
Furthermore, We Buy Ugly Houses franchisees don't get exclusive rights to the territory they operate in. Multiple We Buy Ugly Houses franchisees could be doing business and competing with each other in your region.
We Buy Ugly Houses franchise reviewsAs a home seller, you should do your research before requesting an offer from We Buy Ugly Houses.
Google "We Buy Ugly Houses near me" to find all of the We Buy Ugly Houses franchises in your area — then find out which one has the best reputation, and contact them directly.
Google reviews and Facebook recommendations are a great place to start if you want to know what actual customers think about local franchises.
We Buy Ugly Houses has over 800 franchises in 45 states and Washington, D.C.
Sell to We Buy Ugly Houses vs. Selling with a realtor
The final sale price is the biggest difference between selling to We Buy Ugly Houses and selling on the open market with the help of a real estate agent.
Ugly house buyers never pay fair market value — a trade-off that some home sellers are willing to make for a predictable all cash sale with no contingencies.
Listing your home on the open market might cost you some money out of pocket for repairs and agent commissions, but you'll also introduce competition into the mix, resulting in a higher sale price.
Even if you're looking to sell your home as is on a tight timeline, a good real estate agent can adjust their strategy to help you accomplish your goals without taking a price cut.
We Buy Ugly Houses
~3% commission (+3% to the buyer's agent)
They pay "normal" closing costs
You have to pay some closing costs (1-3%)
Only offers enough to ensure that they'll make a profit (less than fair market value)
Get maximum possible value on the open market.
Very little room for negotiation
Can negotiate with the buyer
No need to prep or do repairs
You might have to prep and repair your house before listing if you want to get the most possible money
A We Buy Ugly Houses case study
We spoke to a verified home seller in Michigan, Barb, who sold her home to We Buy Ugly Houses in 2020.
- Barb told us that she was pleased with her experience and would even recommend We Buy Ugly Houses to a friend because the whole process was so easy.
- She knows that she probably could have negotiated for more money but her situation led her to prioritize a fast, easy sale over getting maximum value.
At the time, Barb was reeling because a previous deal had fallen through and the house was trashed. She was also dealing with illness in her family while the house was vacant.
These difficult circumstances were placing a lot of stress on Barb, so she needed someone to buy the house as is. She contacted We Buy Ugly Houses because she'd received mail from them in the past and held onto their postcard "just in case."
We Buy Ugly Houses ended up purchasing the three bedroom, one bathroom home for $60,000. Two months later, with little more than a new roof and a complete cleaning to remove all of the trash, We Buy Ugly Houses sold the has as is for $116,000 — a gross profit of $56,000.
What if the home had been listed on the open market?
While the scenario described above isn't necessarily emblematic of every single We Buy Ugly Houses transaction, it does reinforce our analysis — home sellers who don't list on the open market are leaving money on the table.
The average cost to sell a home in Michigan is approximately 10% of the sale price.
So, if Barb had just a little bit of time and some cash to install a new roof on the home, she could have sold for $116,000 and netted $104,000 after selling costs.
We Buy Ugly Houses customer reviews
WeBuyUglyhouses.com has a score of 2.5 out of 5 in 65 reviews.
The reviews from actual customers have common themes like:
- Convenience — contact the company and they'll come to you to make an offer
- Ease — just sign a few documents and it's done
- Speed — home sellers like being able to get a quick offer and close in a few weeks
On the other hand, negative reviews of We Buy Ugly Houses include complaints about:
- Feeling rushed to finalize the sale
- Getting an offer that seemed way too low
- Constantly receiving marketing materials without asking
What customers liked
This home seller said that selling to We Buy Ugly Houses was convenient:
This home seller in Washington, D.C. said that the We Buy Ugly Houses people did a great job communicating during the sale:
This home seller appreciated having a professional deal with their property when they needed to sell:
What customers didn't like
This home seller in Seattle felt that We Buy Ugly Houses rushed them through the sale:
A homeowner in Tampa complained that the company's marketing tactics prey on people in vulnerable situations:
This homeowner in Detroit complained that the offer they received from We Buy Ugly Houses was too low to even consider:
FAQs about We Buy Ugly Houses
Is We Buy Ugly Houses legit?
Yes. We Buy Ugly Houses is the trademark of Homevesters, a national brand with over 800 franchises in 45 states. We Buy Ugly Houses buys distressed properties for cash.
Is WeBuyUglyHouses.com a scam?
WeBuyUglyHouses.com isn't a scam, it's a legitimate business. The site is owned and operated by Homevestors and it connects home sellers with local cash buyers who run We Buy Ugly Houses franchises. While We Buy Ugly House might make a low offer on your home, their business operations are completely legal.
Is We Buy Ugly Houses a good deal?
It depends on your situation and how much money you expect to get when you sell your house. Cash buyers like We Buy Ugly Houses generally pay less than fair market value for homes because they are property investors who are looking for opportunities to make a profit.
Does We Buy Ugly Houses pay market value?
In most cases, We Buy Ugly Houses pays less than market value. Most We Buy Ugly Houses franchisees purchase houses in order to repair them and sell for a profit, so they aim to pay 55-65% of a home's after repair value, minus repair costs.
Where can I read We Buy Ugly Homes reviews?
The www.WeBuyUglyHouses.com review page has testimonials from customers, but we've sourced positive and negative customer reviews from various sites to give a more accurate picture of what the company is like.