One of the most stigmatized segments of the real estate market are companies that buy houses as-is and pay cash. There are several reasons for the stigma, but it a lot of it comes down to misinformation and the fact that many home sellers do not know enough about house-buying companies to make an informed opinion about professional home buyers.
To be sure, the house-buying industry is not different from any other industry. There are some bad apples who are either greedy or downright criminal. They make it bad for the rest of us who are trying to actually help sellers in distress and run an honest business. For this reason, it’s time to separate fact from fiction. Below are five myths about companies that buy houses.
Myth #1: “Home Buyers Are Not Real Investors.”
The goal of any investor is to purchase a property and then turn it for profit. It doesn’t matter whether it’s the house on the corner or a multi-million dollar highrise downtown. You can call them whatever you want, but the concept still applies.
Fix-and-flip, buy-and-hold, iBuyers, landlords, wholesalers – they may go about profiting from a real estate transaction differently. But, the end game is the same. So, home buyers are essentially investors. The main difference is that they work more one-on-one with the sellers. It’s a more personalized experience, building trust and relationships throughout the transaction.
Myth #2: “Home Buyers Buy Low and Sell High.”
This statement is not necessarily false. What is false is the implication behind the statement. When people say “Buy low and sell high,” what they really mean is that home buyers are trying to lowball you as much as possible to make a higher profit when selling the house.
Companies that buy houses typically operate in the following way:
- The buyer finds a seller that may be in a distressed situation.
- The buyer appraises the value of the house.
- The buyer makes a fair cash offer at a percentage of the house’s value.
- The seller agrees to sell the house.
- The buyer and seller close the deal.
An honest buyer will not try to take advantage of you and make the lowest possible cash offer on the house. Something else to keep in mind is that the buyer purchases the property as-is for cash; meaning you pay no closing costs, no repairs, and no realtor commissions. You save money in the process.
Myth #3: “Cash Home Buyers Are Only Looking for Certain Types of Sellers.”
This is one of those yes and no myths. Again, it may actually be true, but the implication behind the statement is false.
Nearly every real estate investor has a niche or focus. Some buy only commercial properties, while others work exclusively with residential homes. Some buyers look for houses that are in near-pristine condition, while others like the challenge of getting a fixer-upper, putting the sweat to fix it up, and then turning it.
The problem is that people lump home buyers into the same category. You may hear something like, “They’re only looking for vulnerable sellers desperate to get out of their mortgage.” While this may be the case with some buyers, it’s certainly not the standard operation with all buyers.
The bottom line is this: All home buyers look for an investment. It’s as simple as that. What is different is the type of investment that appeals to each buyer.
Myth #4: “A Cash Sale Can Take As Long As a Traditional Sale.”
This myth is most certainly false. Let’s put it this way: A long-selling and closing period defeat the function and purpose of a cash sale. The whole idea behind buying a house as-is for cash is to avoid a long selling process. It’s what makes a cash sale an appealing alternative to a traditional home sale.
On average, a traditional home sale can take 60 to 90 days. Keep in mind that doesn’t usually include the time you have to spend making repairs and closing the sale once you find a buyer. For that, you can tack on another 60 to 90 days. By contrast, you can typically close a cash sale in as little as seven days. Realistically, you’re probably looking at one to two weeks to accept the offer and sign the paperwork.
Sell Your House As-Is for Cash to Ernest Buys Homes
If you need to sell your house and want to work with a reputable buyer, then contact Ernest Buys Homes. Let s appraise your house and make a fair cash offer today. Call 865-292-2499 to get a fast cash offer today.