Expert Tips: How to Select the Best “We Buy Houses for Cash” Service

Memphis is an attractive city for home buyers and property investors alike. The city boasts a low cost of living and reasonable property taxes that make it a good prospect for buying and selling property.

It’s also an appealing destination for families and those who crave a sense of community. Despite this, the average Memphis property spends 49 days on the market before it’s sold.

If that’s not quick enough for you as a seller, you’re probably tempted to engage with a ‘we buy houses for cash’ to expedite the sale.

Engaging with home buyers for cash can guarantee a faster home sale, but it’s also fraught with risks. Read on to find out how you can ensure you get a fair deal from one of these companies.

How Do We Buy Houses for Cash Companies Work?

According to the National Association of Realtors, cash home sales are at their highest since 2014 in the USA, with property investors making up 42% of these sales. While some of these investors are private parties, many of these sales are undertaken by cash home-buying companies.

You’re likely to come across four types of companies offering to help you sell your home fast:

iBuyers

iBuyers use the latest real estate valuation technology to arrive at a price for your home. They’re active in major metropolitan areas and focus on buying homes in good condition.

Since the homes they buy need very little work, they usually offer higher prices than conventional cash-home-buying companies, but their criteria for selecting homes are very strict.

House Flippers

If you watch reality TV, you’re bound to come across shows where investors buy homes for cheap prices, transform them, and sell them at a huge profit.

The reality isn’t as glamorous as it’s made out to be, but the principles that house flippers adopt are the same. These investors buy homes in very bad condition for low prices and revamp them for resale.

House flippers rarely invest more than 70% of a home’s ARV (After Repair Value) in a home sale, including the cost of the repairs. So, the worse the condition of the home you’re selling, the lower their offer.

Buy and Hold Investors

These types of investors buy your property to rent it to tenants. They typically choose lower-priced homes in need of repairs and then carry out the necessary renovations themselves.

Once they’ve bought the property up to standard, they profit from the rental income instead of selling the home outright.

Trade-in Companies

Trade-in companies can be a good option if you’re looking to buy a new home with the proceeds from your home sale. These companies can provide you with the cash to buy a new house based on the value of your existing one.

They then sell your home on your behalf and take a percentage of the proceeds.

The Benefits of Selling Your Home to a Cash Home Buyer 

There are a few things you can do when you want to sell your house fast, but most of them require time and money. Selling your home to a cash investor is a much simpler process.

Cash house buyers offer significant savings when compared to a traditional home sale. These are:

• Speed
• Reduced Closing Costs
• No haggling
• As-is sales

Let’s explore these benefits in a little more detail.

A Quick House Sale

Cash home-buying companies don’t need a mortgage to buy properties. This cancels the delays associated with mortgage approvals.

Since they have cash on hand, these investors can proceed with the sale right away and offer flexible closing dates to suit your needs.

Reduced Closing Costs

Traditional sales involve paying a real estate agent’s commission at the closing table. These costs can be as high as 5% of your sale price.

You can skip using a real estate agent altogether when you sell your home to a cash home-buying company. They can also arrange to pay some closing costs, like outstanding property taxes, on your behalf and deduct the costs from their offer.

As-Is Sales

The mortgage application process isn’t only time-consuming, but most lenders insist on a home inspection before they’ll loan their clients the requested funds. So, if your home has serious repair issues, you could end up losing the sale or have to pay for extensive repairs before the deal is finalized.

Cash home buyers don’t carry out formal inspections, apart from a brief walkthrough of the home, and they can buy homes with all sorts of unique problems.

If you’re a landlord who’s grown weary of managing a rental property, a cash home buyer can still buy your home, even if you have tenants in place. 

Factors to Consider When Comparing Cash Home Buyers

A lightning-fast home sale may seem too good to be true, and sometimes it is. Cash buyers rarely offer the asking price for a home, as they’re aware that the seller stands to save a lot of money in these circumstances.

It’s a critical mistake to engage with a cash home buyer before researching your options first. There are three key factors to consider before you sell your home to a cash home-buying company, namely:

Reputation and Credibility

Every cash home-buying company should have a website, so a simple Google search will reveal some of the more prominent ones in your area.

Look at the About page for each one to gather more information about the company. They should have:

• A business license
• A contact telephone number
• A physical address

These aspects prove that the business is legitimate and not a fly-by-night operator. You can look at their website to see if they have any customer reviews and check if they’re affiliated with any established national cash home-buying companies, like We Buy Houses.

Take your research a little further by looking for more reviews about the company and its processes. Reputable websites like the Better Business Bureau may reveal customer complaints and also highlight the benefits of working with the company you’re researching.

Don’t let a few unhappy customers put you off. Rather, focus on how the company responded to these complaints and whether they resolved the issues promptly and fairly.

Researching these reviews will reveal what it’s like to work with particular home buyers and help you decide whether you’re comfortable with their processes.

Pricing and Offer Structuring

Most websites will highlight how to go about selling your house for cash. In most cases, this involves a few simple steps, like:

1. Entering your property details online
2. Receiving a preliminary offer
3. A quick home visit or video walkthrough
4. Receiving a final offer
5. Selling your home

Many companies will indicate a time frame for closing or allow you to choose a date that’s convenient for you. Some will offer assistance with moving or other expenses related to the sale.

You might find validation for these claims while reading customer reviews about the company, too. Some companies may indicate how they calculate their offers to help you anticipate how much they might pay for your home.

Transparency and Fees

One of the major drawbacks of selling your home for cash is that you’re likely to receive less than the market value for your home. That’s because these companies, like any other business, must profit from their endeavors.

Once they’ve factored in the costs involved in preparing it for rent or resale, plus their usual margins, there isn’t a lot left over to offer the seller. It’s important to work with a buyer who is honest about how much you can expect to receive from the start and explains to you how they arrive at this figure.

Don’t let a low price put you off. Once you’ve taken the savings on closing costs into account, you’ll find that a cash offer isn’t as low as it seems.

Ask about service or administration fees attached to the transaction and read the fine print before signing any documentation. It’s okay for these companies to charge these fees, but they must state them upfront so you aren’t caught unawares at the closing table.

You should also ask them which closing company they use for their transactions and do some background research on this entity.

Verifying Cash Buyers

You can ask a cash home-buying company to provide proof of the cash available for purchasing your home. Reputable investors should have no problem providing this.

Beware of stalling tactics, and never sign anything with a company you don’t feel comfortable with.

Don’t Give in to Pressure

High-pressure tactics are a red flag. You must feel comfortable at every stage of the home-selling process.

While most cash home buyers won’t negotiate on prices, you should always feel like you have the option to pull out of the sale if you want to.

Sell Your Memphis Home Fast

If you need to sell your home fast due to a divorce, work relocation, or financial troubles, ‘we buy houses for cash’ services could be the best option for you.

You won’t make a fortune from your home sale, but you will be able to sell it much faster than you would with a conventional sale.

Are you ready to make your move? Get a cash offer for your home today.