If you’re considering selling your home, today’s seller’s market means you’re definitely not alone. But you don’t necessarily have to go to the trouble of finding an individual or a family to buy it. Instead, you can consider selling directly to a company that will pay in full, upfront – an all-cash transaction.
Benefits of Using Home Buying Companies
There are different nuances to how companies that buy homes with cash operate, but they all generally have the same simple promise: there’s no need to wait for a buyer to get financing. The business model has many advantages for sellers:
- No Wait: The process is quick – in fact, with some companies you can just enter your address online and receive an instant offer within minutes. If your schedule is tight, you need to move ASAP, or you need cash fast, that kind of speed can be a big advantage. This essentially eliminates the work of preparing the list, organizing open houses and waiting for offers.
- No delicate negotiations on the price or the deadline: “You also know how much you’ll sell and when you’ll sell,” says Jennifer Dohm, vice president of brand communications at Offerpad, which buys homes outright and gives sellers up to 90 days to close. “It lets people looking to buy another home know what they’re working with for their next deal, or make life decisions with a solid timeline of their own.”
- No real estate commissions: With traditional real estate transactions, sellers foot the bill for their agents and the buyer’s agent, which typically takes 6% off the final sale price. Most cash offers do not involve any agent commission. There may be other fees, however, so it’s important to read the fine print.
- No need to pay for work before registration: Many sellers invest extra money in their home before listing it for sale, hoping to attract a higher price. This can include small repairs, larger improvements or home enhancement to make the property look perfect. When you sell your home to a company that pays cash, this is not necessary. “With a cash offer, there’s no cleaning, updating, or repairs needed — no visits at all,” says Dohm.
- Don’t worry about the deal failing: If you’re selling to an individual, there are many scenarios where the sale might not happen. Maybe they decide to pull out after a home inspection reveals a problem, or maybe a lender doesn’t approve their loan. If you receive an offer from a company that pays cash, you can be pretty confident that the deal will close.
What types of businesses buy houses for cash?
There are different types of companies that typically make cash offers on homes:
|type of company||What they offer|
|Fix and return||Home flipping companies want to buy properties in poor condition, repair them and resell them for a profit. Often these companies advertise that they are buying homes “as is”. If your property is in very poor condition, this could be an attractive option.|
|buy and keep||On the other hand, buy-and-hold companies focus on keeping the house and turning it into a rental property. Rather than making an immediate one-time profit by selling, the house becomes a steady stream of rental income.|
|Exchange||These companies are designed to help you buy your new home before you sell the one you live in.|
|iBuyers||The “i” in iBuyer stands for instant. You’ll likely enter your address into a search bar and the company’s algorithm will generate an offer for your home within minutes. It’s supposed to feel as simple as traditional e-commerce giants like Amazon.|
Companies that buy houses for cash
Traditional Cash Purchasing Companies
We buy ugly houses
As the name suggests, this company is happy to buy your home even if it doesn’t seem ready to list. “Ugly” isn’t just about physical appearance either. The company buys properties with high interest financing that does not work for owners; homes with bad memories due to divorce or death; and a range of features that could make life less desirable for the current owner.
HomeVestors operates over 1,100 franchises across the country. The company has collectively purchased more than 125,000 homes since its inception in 1996.
We buy houses
This company has more than 200 independent real estate investment offices in more than 30 states. Rather than operating solely online, after entering your address, a local representative visits your home in person to assess its value and make a cash offer.
This regional company buys an average of 25 homes each month for cash in Pennsylvania, Maryland, Northern Virginia and Washington, D.C.
HomeGo, however, buys a lot of homes for cash — one every 20 minutes, according to its website. If you really need cash fast, the company offers a valuable advantage: closes in as little as seven days.
I buy houses
I Buy Houses is a network of individuals and businesses who want to buy houses with cash. The company acts as an intermediary, connecting owners who wish to sell with interested members who could make an offer to buy.
Another network of individuals and investors – but with Sundae you list your home on the company’s network and they do an in-person visit. Four days after a home inspection is complete, it presents multiple cash offers from multiple buyers for you to choose from.
iBuyers and repossession companies
Opendoor aims to buy homes with valuations between $100,000 and $600,000. The company also operates primarily in major metropolitan areas, so it’s not a good option for owners in rural areas.
HomeLight’s simple selling offer values your home based on your neighborhood data. You can get paid in just 10 days and you have up to 30 days from closing to move out.
You may already use Redfin to compare prices or view listings, but the real estate brokerage also operates a service that offers cash deals for homes. Note, however, that RedfinNow charges a service fee, which can range from 5% to 13% of your home’s value.
Block of offers
Offerpad’s express offer service gives you an offer within 24 hours and up to 90 days to move. If you qualify for the company’s Flex service, you can test the open market with a cash offer as a backup. Dohm adds that the company also includes a free move within 50 miles of your old home.
Orchard isn’t really buying your house for cash, per se. It gives you money — up to 90% of the value of your current home — to buy your next one. Then he takes care of sprucing up your old home and listing it once you’ve found a new place to call home. Everything is designed to help you avoid paying two mortgages at the same time or trying to buy a house while selling the old one. It’s only available in select metro areas, including Atlanta, Austin, Charlotte, Denver, Phoenix, and Seattle.
Similarly, Knock is another company that allows you to buy a new house and then sell your old one. However, it is not about paying cash; the company takes out a new loan for you. The service – known as Knock Home Swap – is available in 16 states.
Flyhomes is another company that helps customers buy a new home before selling the one they currently live in, and like Orchard and Knock, it’s not really a cash offer either. The company has a mortgage business, so you will have a short-term loan – plus the option of a long-term loan for your new mortgage once your old house is sold. The company also operates only in certain markets, including the San Francisco Bay Area, Southern California and Boston.
Should you sell your house for cash?
A cash sale can go much faster, but a traditional sale is more likely to get a higher price for your home. If you’re trying to figure out if you should sell your home for cash, it ultimately comes down to two key factors: what condition your home is in and how long you can afford to wait. If your home needs serious repairs that you can’t afford or if you need to sell immediately, companies that pay cash for homes are a good option. If the house is in good condition and you have the time to spare, you’ll likely make more money in a traditional sale, with a knowledgeable real estate agent on your side.
If you want to explore your options, you can always see what some cash buyers are willing to offer to get an idea of what you could gain with a faster transaction. Then, talk to a real estate agent to get a professional opinion on what they realistically think your home could offer on the open market. Don’t first sign a contract with an agent; you may be required to pay them a commission even if you choose to sell quickly.