There are a large number of house buying companies all across the country that advertise as wanting buy houses in “as is” condition, in addition to being able to pay cash for them and close much faster than a conventional buyer. So why would you want to contact one of these companies in your area if you have a challenging house to sell? Also isn’t it true that those types of companies just want to try and rip you off? These are two very important questions that I’m sure you have asked yourself if you have a fixer type house to sell that may not be best suited for the retail market in its present condition. For the remainder of this article I am going to address these important questions and more in order to help you better understand why these “We Buy Houses” companies exist and how you may be able to utilize the services they provide in your area.
If you happen to be in a situation where you need to sell a house that is in dyer need of major updating and/or some renovation and repair you can be sure that the traditional way of selling a house will be a bumpy ride for you. When people have a “pretty house” to sell they generally call their local realtor, have them come up with a list price that is supported by comparable properties and they list the house for sale on the RMLS realtor network. The hope is that other realtors will see the property and have a buyer for it, then soon thereafter you will be presented with an acceptable offer for the property and you will be on your way to a hassle free closing. Although no real estate sale is that easy these days, that is the general process for houses that don’t need and major updating or repair.
If you do happen to be selling a house that is in need of minor TLC and updating to major renovation and repair, you can pretty much expect a bumpy sales process if you plan on going the traditional route that was just described. The first reason is because most people will always contact a realtor or two in the beginning stages of trying to sell a property….and in this type of case that is where the first misstep can take place. The problem with houses that need major updating and repair (besides the obvious) is that realtors generally have no clue what they are really worth, so quite often they will throw out a number that sounds great in theory but will never come to fruition. I like to call this buying the listing and some realtors will do it intentionally to help secure a future paycheck while others will do it out of pure ignorance because they just don’t know any better. The 2nd major stumbling block that you will hit going this route is that you run a large risk of having multiple sale fails. This is because your home will be on display for every inexperienced rehabber in your market to make an offer on, and after they have wasted 10-15 days of your time most of them will finally realize that they are paying too much for the house and back out of the deal. My house buying company buys a number of houses every year from unhappy sellers who have been highly irritated by the process of listing at one price, having multiple sale fails and ultimately selling at a much lower price. Now don’t get me wrong, there are many houses that should be listed at higher prices and will eventually sell at close to that, but if you know your home is in need of some major renovation and repair you might want to think twice about listing the property with a realtor if you want to see it sell anytime in the near future.
So what is your alternative you ask? Well that is where the “We Buy Houses” companies come into play…..You see some of those companies are seasoned real estate rehabbers who have a very educated eye when it comes to buying houses that are in need of major renovation and repair. So now think about the process I described above and compare that to receiving a cash offer with a quick closing from an educated individual who will absolutely honor the contract and close the deal on time. Now you may not always like the cash price that some of these companies will offer if you have already spoken with a realtor, but you have to remember that the property is only worth what it will sell for and not what a realtor or Zillow thinks its worth. When people buy houses in need of major renovation and repair they are taking a risk by basically paying you to take on a major project. So in return for that risk and the work that goes along with it there must be a reward; otherwise nobody would ever buy houses that need repairs. To make it very simple to understand nobody is going to buy a house for $150,000 that needs $50,000 in repairs for it to then be worth $200,000. They may look to purchase the property for between $100,000-$120,000 but probably no more than that, and if they are looking to buy it for more you can be pretty sure that the sale will fall through at some point. This is a major reason why some people believe that the “We Buy Houses” companies are just trying to rip you off, when in actuality they are just trying to purchase your property at a price that will adequately compensate them for all of the risk and effort they will be putting into it.
So how do you know which “We Buy Houses” company to call to get the best deal? This is a great question and one that I’m sure you have asked yourself at some point. Make sure to do some research on the company ahead of time to see if they have a website, vanity phone number and anything else that makes them look like they are running a real organized business. Also make sure to ask if you can see pictures of some of there previous renovation projects, that way you know you are dealing with an actual rehabber and not just a real estate wholesaler who will be looking to sell the property to a rehabber for a profit. For my house buying company we actually built an entire website around showcasing all of our renovation projects, and I always share it with every seller that we meet with so that they can check it out in order to see what we are capable of. If you are able to find a quality “We Buy Houses” company in your area I would absolutely suggest selling your fixer property to them if you feel that the price they offer you is fair based on the amount of repairs that are needed. Just remember that there will need to be a profit in the deal for whoever buys your property, otherwise it will just sit on the market until you lower the price to a point where it makes sense to take the risk of purchasing it. I hope you enjoyed this article and found the information useful when it comes to selling a house in need of renovation and repair.
Added: by Utopia Realty