Have you noticed those posters all over town? The ones that say “We buy houses”, “Cash for houses”, “Sell your house fast” or some variation of that along with a phone number? They are everywhere. What about those signs? Why do people want to pay cash for houses?
Well, most of those posters are put up by real estate investors. We pay cash for the houses as an investment. We buy houses below market value, repair them, and sell or rent them for a profit.
You may be wondering why someone in their right mind would sell their home below market value, and that’s a good question. Actually, there are many reasons why people may want to sell a home quickly. Maybe they inherited a house far from where they live. Many people in this situation do not know where to start selling their property, and the prospect of selling it in a matter of weeks for cash is very attractive to them. Some other people who might want to sell quickly for cash include: those facing foreclosure, divorcing couples, tired homeowners, and people who don’t have the time or cash to do the repairs themselves.
In a traditional real estate transaction, you would list your home with a real estate agent, make any necessary repairs, prepare the home for displays, and put it on the market. Depending on the market, your home could sell from a month to more than a year. You would have to deal with potential buyers constantly walking by your home, and when you finally get an offer, buyers will use property inspections and appraisals to try to lower the price even further or have you make repairs before closing. After all is said and done, you are paying closing costs (such as escrow fees, title insurance policy, and home warranty), real estate agent commissions (usually 6% purchase price), maintenance costs for as long as your home was on the market (mortgage payments, home insurance, property taxes, utilities, and maintenance). Often times, you will also have to pay for professional photography or staging.
Once you add in the costs, time commitment, and hassle, it’s no wonder that many people are looking for other options to sell their home. For many people, those “We Buy Houses” signs are the breath of fresh air they have been looking for. While not necessarily the best option for everyone, if you calculate the numbers and consider the value of your time and sanity, it often makes perfect sense to see if a cash offer from an investor could work for you.