How “We Buy Houses” Works

Homeowners can face a wide range of reasons to sell their homes, including downsizing, avoiding foreclosure, divorce, inherited an unwanted property, or simply needing to move in a hurry. For those who don’t have the time to make a traditional sale, a “we buy houses” operation can offer a fast, hassle-free alternative.

Investor companies that purchase properties for cash can close the transaction in as little as 14 days. In contrast, a traditional sale can take up to 60 days. This faster turnaround can be particularly helpful for homeowners facing a financial emergency, like a medical crisis or job transfer that makes it impossible to delay closing on their current home.

A ‘we buy houses’ company will assess your home in person, determining its value using local market data and proprietary algorithms. It will then make you a preliminary offer within a few minutes to a few days. During this process, the buyer will ask questions about your home and may request a home inspection, which will be deducted from the original purchase price if you agree to it.

After the in-person valuation, the ‘we buy houses’ company will provide you with a final cash offer. This is the amount they’re willing to pay you for your house, assuming it will be renovated and sold at a profit. It’s also the amount you’ll receive when you accept an offer and sign a sales agreement.

In addition to evaluating your home, a we buy houses company will assess the cost and timeline for renovating it and determine whether it’s worth the risk of buying it at a discounted price and investing in its repair and resale. As a result, these buyers typically make lower offers than the typical Realtor(r)-recommended list price of your home.

While some investors can be legitimate, there are others who are not. Be wary of any homebuyer who pushes a verbal offer, or asks you to pay upfront application fees. It’s also important to work with a company that is licensed to buy and sell real estate.

A reputable ‘we buy houses’ company will also conduct thorough background checks on its employees. Moreover, it will comply with the Fair Housing Act and other relevant local and state laws.

Many homeowners are tempted to sell their homes to a “we buy houses” company because they want to avoid the costly commissions that come with listing a home with a realtor. Those commissions can be up to 6% of the sales price. A for-sale-by-owner FSBO sale can be even more expensive, since the homeowner must research and price their own home and negotiate with a prospective buyer.

Homeowners often use a “we buy houses” company when they don’t have the time or funds to prepare their home for the market. Getting a home ready for sale can involve extensive pre-listing cleaning, touch-ups, and repairs. And, once the home is listed, maintaining it for open houses and showings can be a full-time job for those with busy schedules.