Are Cash-for-House Companies a Scam?
If you need to sell your house fast, you’ve probably considered — or at the very least, heard of — cash-for-houses companies. But is working with one of these types of home buyers actually a safe way to sell your home? Or are you likely to get scammed?
Read on to learn what cash-for-houses companies are, how they work, and whether or not they’re an option you should consider to successfully sell your house.
What Are Cash-for-Houses Companies?
Cash-for-houses companies, also referred to as cash home buyers, are typically real estate investors. Many people also refer to these types of buyers as opportunity investors because they frequently work with distressed homeowners who need to sell their properties quickly.
These types of buyers are typically able to purchase houses regardless of their condition because they have the resources to perform any necessary repairs and renovations. Generally, cash home buyers are also capable of closing on properties quickly, usually in 30 days or less.
Because these buyers offer cold, hard cash, they do not need to arrange financing for the purchase of the property. As a result, they can complete a sale much more rapidly than a traditional buyer could. In most cases, cash-for-houses companies also waive inspection contingencies since they undertake all necessary renovations using their own resources.
Cash-for-houses companies also forego seller commission fees, unlike traditional real estate agents. While this might raise a red flag in the mind of the seller, it shouldn’t. The entire process is designed to be as streamlined and lucrative for the seller as possible, especially if that individual is attempting to sell a home in less-than-desirable condition.
How Do Cash-for-Houses Companies Work?
Although cash-for-houses companies might seem too good to be true, they are absolutely not a scam. The process is designed to offer a much-needed lifeline for distressed sellers so they can quickly offload houses they no longer want, need, or cannot afford. Here’s how the whole thing typically works:
The seller contacts a cash-for-houses company. An interested seller reaches out to a cash-for-houses company with basic details about the property they’re looking to sell.
The cash home buyer schedules a property walkthrough. The cash home buyer contacts the seller to schedule a convenient time for a property walkthrough and assessment. This walkthrough allows the buyer to assess the current condition of the house and property, along with several other factors that can affect the as-is market value of the home.
The buyer builds a fair, as-is cash offer. After completing the walkthrough, the cash home buyer finalizes the fair cash offer, which reflects the current condition of the home and any renovations that must be made. The state of the current real estate market and the value of other properties in the area also factor into the buyer’s final cash offer.
The seller decides whether they want to accept the offer. The seller has the opportunity to review the cash offer, generally for a period of 30 days. As with a traditional real estate transaction, the seller can choose to accept or deny the offer. Should the seller choose to accept, they typically have some flexibility on the property closing date.
Both the buyer and seller close at a reputable title company. When the buyer and seller agree on a closing date, they meet a reputable local title company to close the deal. The buyer then receives their cash and the deal is finished.
Please keep in mind that there are certainly disreputable companies in the cash-for-houses industry that have garnered a negative reputation. To ensure you don’t get scammed by such a company, It’s critical that you do your due diligence and research any cash home buyer thoroughly.
If you have any further questions about how the cash-for-houses process works, check out our helpful list of frequently asked questions!
Looking for a Cash Home Buyer?
If you need to sell your house fast, get in touch with our team at Frank Buys Houses today. We would love to help you sell your property quickly, for a fair cash price. To learn more or get your offer started, complete our online form or give us a call today at (209) 650-3110.