Updated July 31, 2019
We Buy Ugly Houses is a nationwide network of local property investors who will make cash offers on homes regardless of their condition or location. It's a popular choice among people selling homes that are in poor condition, or due to external pressures like legal proceedings, mounting debts, or a looming foreclosure.
After submitting your information online, you'll be connected with a local We Buy Ugly Houses franchisee who will visit your home, conduct an on-site inspection/appraisal, then make a cash offer. Timelines vary, but most sales take less than 30 days.
Of course, that speed and convenience comes at a high price. Expect a lowball offer for your home — often 30 to 50% below market value.
If you're looking to sell quickly and hold onto as much of your equity as possible, listing with a real estate agent is the best option.
Top realtors can help you find a qualified buyer quickly. Timelines are often comparable to typical cash buyer sales. What's more, they'll help you get a much better offer — likely at or above fair market value.
Before you decide to sell to a cash buyer like We Buy Ugly Houses, speak to an agent (or two) to assess whether they can help you sell within your desired timeframe — and net more on the transaction.
Of course, there are situations in which We Buy Ugly Houses will be your best option. The "right" decision ultimately depends on your specific needs and goals.
Read on for more information about We Buy Ugly Houses, including pros and cons, reviews, and good alternatives to consider.
What is We Buy Ugly Houses?
We Buy Ugly Houses is a subsidiary of Dallas-based HomeVestors of America, Inc., the largest cash buyer organization in the United States. The “Ugly Houses” brand is known for making quick, cash offers on homes that are dilapidated, in need of serious repair, or even abandoned.
HomeVestors franchises out the We Buy Ugly Houses brand to individual property investors, who canvas their local markets for distressed or undervalued purchase opportunities.
In words, when you sell your home to a We Buy Ugly Houses buyer, you're dealing with an independent contractor. This isn't necessarily a negative; it just means that seller experiences can vary wildly between individual franchisees.
How does We Buy Ugly Houses work?
When you opt to sell your home through We Buy Ugly Houses, the process generally goes something like this:
- You contact We Buy Ugly Houses by submitting an online form or calling their toll-free number
- A local franchisee will send a representative to your home for an on-site inspection, usually within 24 hours
- The representative appraises your home using a proprietary valuation model and makes you a cash offer, often on the spot
- If you accept the offer, you sign paperwork to begin the sale process immediately
- You pick a closing date, or agree to the soonest possible close date, which is typically three to four weeks
- On closing day, you sign the sale paperwork at a local title transfer or attorney's office, the sale is recorded, the cash is transferred to you, and you hand over the keys
What's the difference between cash buyers and iBuyers?
A cash buyer is an individual investor or company that usually operates in a limited area, and evaluates a property's value based on a proprietary model, which in some cases could just mean gut instinct and an educated guess.
An iBuyer is essentially the Internet-Era version of a cash buyer. An iBuyer is typically backed by venture capital and uses advanced analytics to come up with a property's theoretical value.
Selling with an iBuyer is often faster than selling with a cash buyer, although their service fees, which are often in the range of 13%, take a substantial bite out of the seller's piece of the pie.
Though their methods may differ, cash buyers and iBuyers both work on the same principle: buy as low as possible, and sell high.
Pros and Cons of We Buy Ugly Houses
Selling with We Buy Ugly Houses does have certain advantages, but these advantages often come with downsides.
- Will purchase your home “as is,” even if it has serious structural issues, needs major repairs, or has been abandoned
- You'll receive a quick cash offer, often on the same day as the on-site appraisal
- HomeVestors claims to cover “normal” closing costs
- HomeVestors is a large, national company, with over 1,100 franchisees in 45 states
- The cash offer is typically low — sometimes up to 50% less than a property's fair market value
- The selling process can take up to a month, much longer than with an iBuyer, and not significantly faster than a traditional, agent-assisted sale
- The franchisee/independent contractor model can lead to inconsistent experiences
What percentage of market value does We Buy Ugly Houses offer?
The primary drawback here is that the cash offer you'll receive from We Buy Ugly Houses will almost certainly be far below your property's fair market value — it will definitely be less than the price that you could get working with a top real estate agent.
People who sell to cash buyers like We Buy Ugly Houses often take 30 to 50% hit on price — in contrast, sellers who list with top agents routinely net as much as 125% of their property's fair market value.
The average American home value is $227,700. If you were selling this home to a cash buyer, you might get as little as $113,850. A top agent, on the other hand, could net you as much as $284,000. That's a potential gap of just over $170,000.
The real kicker is that, with competitive pricing and a proper timing of the market, a savvy agent can more or less match We Buy Ugly Houses for speed of sale. We'll cover specific time frames below.
Reviews of We Buy Ugly Houses
A survey of consumer reviews on the We Buy Ugly Houses page at the Better Business Bureau reveals some concerns, though most complaints seem to have been satisfactorily resolved.
Keep in mind that, because of the HomeVestors franchise model, every We Buy Ugly Houses buyer is essentially an independent contractor. To gauge the reputation of your local We Buy Ugly Houses franchise, always look for reviews from your local market.
Is We Buy Ugly Houses legal?
Absolutely. Sellers who work with We Buy Ugly Houses make informed, voluntary decisions to sell their properties. Any distressed properties that are uninhabitable or under code are renovated before being flipped, either by We Buy Ugly Houses or an intervening buyer.
But what if I'm desperate to sell my house?
When you need to sell fast (and you're not considering profit or equity retention), We Buy Ugly Houses can be a sensible option. Not only will you receive a quick cash offer — you also won't have to pay for any repairs or improvements yourself.
But these sellers might be surprised to learn that they can sell their home just as fast with an agent, and likely net a much better sale price.
The reason agent-assisted sales typically take longer than selling to a cash buyer is the agent is looking to get the best possible price for your property.
They do this through strategic marketing and pricing tactics — i.e., setting a list price just short of the top of the market to attract interest from multiple parties and ignite a bidding war.
Usually, this takes time. But if a quick sale is your main goal, an agent can price your home aggressively to attract immediate interest, eschew negotiation, and then screen the prospective buyers for factors like mortgage pre-approval to select the one who could close in the shortest amount of time.
Selling a Home “As Is”
But what if the property you're selling is distressed? Selling a home with a leaky roof or cracked foundation isn't ideal, but it's also probably not as much of an obstacle as you might think.
In fact, a property's location, and the land that it sits on, probably determines more of its value than the physical condition of the home itself.
Of course, that's not to say it doesn't drag down a property's value. It does.
But while you may not be inclined to spend time and money renovating a home you're actively trying to unload, you don't have to completely renovate a property in order to pump up its value before a sale.
A thorough cleaning and decluttering, proper staging, and a fresh coat of paint collectively costs much less than, say, a new roof, but can still increase a property's value and, perhaps more importantly, be done in a matter of days.
How long does it take to sell?
One of the main advantages of selling to We Buy Ugly Houses is speed.
The best realtors can often secure a qualified offer in a matter of days — sometimes even hours. The real time drain in a traditional real estate transaction is the closing process, which, on average, takes between 35 to 45 days in a typical lender-backed purchase.
Because We Buy Ugly Houses buyers pay cash, you can expect a faster time to offer and closing period. Most sales take about three to four weeks (sometimes a bit longer) to go through.
While this might seem appealing, the reality is that it's not much faster than working with a top real estate agent — and you sacrifice a huge amount of money in exchange for the 5 to 10 days you might save.
If you'd like to speak with a top-rated local real estate agent to learn more about how they sell homes quickly, Clever can help.
Clever partners with top agents all across the country from major brands and brokerages like Keller Williams, RE/MAX, and Century 21. As of July 2019, home sellers who work with a Clever Partner Agent get an offer in an average of 13 days. And keep in mind that those numbers reflect all home sales — not just sellers who were on a tight timeline.
How to Sell Fast and Save Thousands
Importantly, when you list with Clever, speed isn't the only advantage you gain. Selling with a traditional agent usually comes with a hefty price tag — a 6% commission fee, which is split between the two agents involved in the transaction (i.e., the listing and buyer's agents).
While 6% is nowhere near the 30 to 50% you stand to lose by selling to a We Buy Ugly Houses investor, for many homeowners, it's still a tough pill to swallow.
The good news is that when you list with Clever, you get all of the same services and support you would with a traditional full-service agent, but for a fraction of the typical cost.
Clever Partner Agents provide full service — including pricing strategy, listing on the MLS and hundreds of other real estate sites, marketing, negotiations, closing and more — for a flat fee of $3,000, or just 1% if your home sells for more than $350,000.
Sellers who list with Clever save an average of $10,000, compared to what they would have paid working with a traditional agent.
In other words, that fast, break-even sale turns into a fast, highly profitable sale — and all it costs you is a handful of days, if that.
If you need to sell fast but don't want to sacrifice a huge chunk of your hard-earned equity in the process, get in touch with Clever to connect with top-rated agents near you!
Top FAQs About We Buy Houses for Cash
What is HomeVestors?
HomeVestors is a Dallas, TX-based company, founded in 1996 by a real estate broker named Ken D'Angelo. It specializes in buying distressed properties through its We Buy Ugly Houses brand. HomeVestors has more than 1,100 franchisees in 46 states and Washington, D.C. operating under the We Buy Ugly Houses brand, and using HomeVestors' proprietary home valuation and lead management software. According to its website, HomeVestors is the largest cash buyer in the U.S., and has bought more than 95,000 properties since 1996.
Will they buy houses in any condition?
In theory, yes, We Buy Ugly Houses will buy homes in any condition. However, the worse the house's condition, the lower their offer will be.
Does Zillow buy houses?
Yes. Zillow recently debuted Zillow Offers, its iBuyer program that makes cash offers to eligible properties in two business days or less. That said, Zillow Offers' operating model is somewhat unconventional; it makes a cash offer first, likely using a combination of in-house algorithms and publicly available data, and then sends a representative out to inspect the home and make any necessary adjustments. If the evaluator decides repairs are necessary, the cost of those repairs are deducted from the initial cash offer. Zillow Offers charges a service fee of up to 9% of the home's value, which comes with a flexible closing date, though sellers are responsible for closing costs.
Can you sell a house for cash?
Of course! It's easier to sell a house for cash now than it's ever been, thanks to the rise of the cash buyer and iBuyer industry. But while selling a house for cash will get you a quick payment, you'll certainly receive much less than the fair market value for your property. Selling a house for cash only makes sense when you're under serious pressure, and price isn't a consideration.
Should I sell my house to an investor?
Investors make money by flipping homes — i.e., purchasing them on the cheap then reselling them quickly for a higher price. That means that their offer must be below a property's fair market value for them to turn a profit on the sale.
If you're selling, the upside is that they're offering a quick sale and cash payment. The downside is that you won't get anywhere near your home's fair market value. If this is an acceptable sacrifice, selling to an investor might make sense for you.
Compare this to a traditional agent-assisted sale: the agent works to find a third-party buyer for your house, and, since they're working on commission (i.e., a percentage of the final sale price), it's in their best interest to sell it for the highest price possible. Though this process will take slightly longer than selling to an investor (possibly only 7-10 days longer), it will yield a payoff much closer to the fair market value of your house.
What is the fastest way to sell a house?
Selling to an iBuyer is probably the fastest way to sell a house. An iBuyer, using advanced analytics and proprietary valuation algorithms, will be able to appraise your home almost instantly and make a cash offer within days or even hours.
But it just so happens that the fastest way to sell a house is also the least profitable. The typical iBuyer makes lowball offers that are non-negotiable, on top of charging service fees hefty service fees — often between 9 and 13%. If you're a highly motivated seller, you could find yourself with no choice but to accept a sub-optimal offer.
Why do people buy houses for cash?
Cash buyers purchase houses for cash with the intent of turning around and reselling them. Some renovate and flip, others resell as-is. Because carrying a property can be expensive and risky, especially if the market fluctuates, they try to sell their acquisitions as fast as possible; some cash buyers list their acquisitions on MLS within days of purchase.
The aggressive pricing strategy they use to encourage a quick sale necessitates paying you, the seller, as little as possible in order to protect their profit margins.
Is a cash offer on a house better?
A cash offer has one advantage over a conventional payment: speed. Working with a cash buyer yields a quick sale, and the cash is usually wired into the seller's account within a day of closing.
However, if we're talking about getting the best value out of your home, a cash offer is rarely the better option.
What is iBuying real estate?
An iBuyer is a property investment company that uses data analytics and algorithmic modeling to determine the value of a house almost instantly. Because much of this evaluation is done online, they can often extend a cash offer before they even see the home. However, most iBuyers will eventually do an on-site inspection and adjust their offer in accordance with any unforeseen issues or necessary repairs.
These iBuyers generally charge high service fees, but move very quickly. Because their offers are based on hard data, they're usually non-negotiable.
How long after closing does a seller get the money?
The seller usually receives payment one or two business days after closing. If an escrow company is involved, they may need written instructions before they can release your funds. And even if the money is wired directly into your bank account, your bank may take one or two business days to credit your account.
Why can't the buyer just hand over a briefcase of cash? Well, closing is a technically a settlement, which means that it's the time for the buyer and seller to settle up with all parties who are owed money. These could include title companies, escrow companies, attorneys, or anyone else associated with the sale. All legal obligations must be settled and satisfied before the seller receives their money.