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Should you let a home buying company take yours off your hands?

by | Jan 18, 2022 | Real Estate Practice

We’ve all seen those ads on late-night TV, maybe when we’re watching old Seinfeld reruns, for companies that will buy your house for cash, regardless of the condition. You may not pay much attention to them until you need to sell your home quickly.

Maybe you have an opportunity for a better job in another city and need to move as soon as possible. Perhaps you inherited a house from a parent that you don’t want or need. The chance to unload your house without the hassle of getting a real estate agent, fixing it up, having strangers traipse through it and dealing with all the headaches that come with traditional home sales can be tempting.

Are these companies legitimate? If so, is the time and hassle you save worth the money you’re probably giving up by taking this shortcut? It depends.

There are multiple types of home buying companies

First, there are different types of businesses that buy houses. These include:

  • Franchise cash buyers: These are often national companies that franchise their operations to local franchisees. They typically buy homes for cash, fix them up and resell them or turn them into rental properties.
  • iBuyers: Well-known real estate sites like Zillow and Redfin have gotten into the business of buying homes. They typically buy homes that need little work and therefore may offer a better price than franchise cash buyers.
  • Trade-in companies: These will buy a home from the seller and then sell it for them, taking a percentage of the sale price.

Individual investors will also buy homes that need some work and then resell them for a profit. So-called “house flippers” are the most common of these.

If the market is good, you may not need them

Before you choose to forego the traditional home sale route for a quick cash sale, it’s worthwhile to look at the current housing market in your area. If homes are getting multiple offers for more than the asking price as soon as they’re listed and yours doesn’t need a floor-to-ceiling renovation, it may be worthwhile to take a little extra time and partner with a real estate agent.

If you choose to go for a quick cash sale, it’s wise to stick with a well-known company with a solid reputation. It’s also wise to seek legal advice to help avoid any potential pitfalls you may not have anticipated.