Sometimes, as in The Wizard of Oz, someone drops a house on you. You inherit one you don’t want. Or life hands you bad luck, and you’d prefer not to be responsible for your house anymore.
Maybe you see an ad on a billboard or online for a company that buys houses for cash, and that seems like a great idea, because you’d love to have more cash and no house to worry about.
Take a breath, and read on. Because there’s a right way and a wrong way to sell your house for cash.
The Wrong Way…
…is to leap headfirst into a cash deal, without knowing who these buyers are or what they do.
They may seem like folks able to help you out of a tough situation. But their business is buying houses for much less than they’re worth, and then flipping them for large profits. Your well-being is not on their agenda.
They will offer you 65-80% of the house’s value in cash, and once you sign, you give up the right to debate the amount. Finding out later how much more the house was worth won’t help you; after closing, there are no legal steps you can take against them.
Many properties they buy are heading into foreclosure, are damaged, or are empty. Or the sellers are facing divorce, unemployment, or other misfortunes that make a house a financial burden. If that sounds like preying on the vulnerable, well, they can’t force anyone to sign on the dotted line, but some people may not be hard to persuade.
The business is also full of scam artists who don’t operate honestly. Some sellers have been tricked into signing their homes away for nothing.
Not considering this information carefully is the wrong way to sell your house.
The Right Way…
…well, there are two right ways.
One: Go ahead and sell your house for cash to one of these companies, but do it with your eyes open.
Get your house appraised if you can, and research the “comps,” or the sale prices of comparable homes in your area. Their offer may not be negotiable, but at least you’ll understand it.
Get proof of funds from the buyers before you sign anything. Always know what you’re signing.
Decide yourself on your own priorities. If the money and no house is not just tempting but really benefits you, selling for cash may be the right choice.
If the house is in terrible condition, and selling “as is” for cash is the realistic option for your life, then it could be the right choice. If the buyer finds more problems later, they also cannot back out.
In some situations, as they say, “less is more.”
Two: Check out top realtors in the home’s area, who know the local market. Even if you’re across the country, a realtor can handle the appraisal, the comps, and repairs/upgrades the house requires. Your realtor is a professional who abides by a code of ethics and works for you.
Yes, this right way costs some money, but many improvements require relatively little investment. You may even be able to get financing for these costs. The result will be Return on Investment for you: your realtor will get you a higher sale price, equal to, if not more than, the house’s value. What you pay in funds and patience will come back as profit, certainly more than that 65% offer.
You may even find a buyer who can pay cash! In any case, it’s wise to let a real estate agent help you find the buyers who will pay the full value of this house.