We’re buying houses. You’ve probably seen their signs on the radio, or heard their ads. They are spreading their message even in a competitive real-estate market. Yet, who are these people and how can they be able to buy houses constantly? Where are they getting the money? What are they doing to the houses? Let’s look at this one. Learn more about Long Island We Buy Houses.
Firstly, they’re investors and they want to make money. Since they have been around for quite some time now, even in difficult economic times, their business model is likely to work for them. They do make money.
When a homeowner who is considering selling his or her house approaches, there will be certain aspects in their delivery. Here’s what you can expect:-we’re going to pay cash;-we’re going to settle quickly;-there’re going to be no fees or bonuses to be paid to a real estate agent;-they’re just going to ask you how much you owe to the house in mortgages and other liabilities;-we’re going to have no contingencies for any kind of inspections;-we’re going to buy your house as it is;-you’re not going to have to do any repairs;
It sounds like a really good path to take so far. Selling your house is a hassle free way.
Indeed in some situations, selling his or her house is an expedient and profitable way for a homeowner. But not always this is the case. Let’s look at it closer.
-If you go to the negotiation table you get cash, even though the buyer gets a loan to buy the home. The only way you won’t earn cash is by funding the house yourself, which is never the case. When the borrower gets a loan, they will give you a letter of pre-approval and in the end they will send you their lender’s letter of loan commitment. When that happens it’s nearly as good as having cash from the buyer. You will follow similar measures to a borrower using a loan when someone is paying with cash. First they should have evidence that they have the money and second they should actually be willing to put it in an escrow account before payment, which will show that the object of the money is to buy the home. They are definitely reluctant to do this.
-Fifteen days can be a fast settlement. If they do provide a 15-day settlement deal, then you should make sure you can easily resolve that. It’s more likely that they will eventually have closer to 60 days of settlement. A settlement date of 2 months is not unfair, but their true reason for doing so is because they don’t really want to buy your house. If they really have cash then within 2 to 3 weeks they could easily settle. Nonetheless, they are trying to find another buyer during this 2 month period. They would sell the house to that buyer at a price higher than they pay you if they find another buyer. They will allocate the contract to another customer in this case, and the price difference would be considered an assignment fee. When all their deals go like this, they’ll never need any money to come up with. Bear in mind, though, that in some cases an offer is not allowed, and they can go ahead with the transaction but usually only if they have another buyer lined up to whom they can sell the house immediately. If they don’t have another customer ready to go, then they’re going to look for a excuse to get out.
-They’ll inform you that by not having to pay a fee to a real estate agent, you’ll save about 7 per cent. Yes, there are cases in which an agent charges 7% for the sale of your home and where necessary, but usually commissions are not 7%. These may be closer to 5 per cent on average and may be lower. They’re not going to give you this money, though; but they’re going to ask you to reduce the home price by 7 percent, as you don’t have to pay an agent. And in the end, with or without an agent, the net income on the house would be the same. If you don’t have an agent then you don’t have someone looking after your interests. For no service and no representation, you give up 7 per cent.
-How much you owe to the buyer on the estate should be irrelevant. He should be providing a price that would work for him. If the price is too low to cover what you owe, then you are not going to consider it. The reason you ask what you owe is that they are going to make an offer that’s just enough to cover that number. If the amount they want to offer is less than you owe, then they are not going to make an offer, but otherwise they will go down to that amount. All this means is take the equity that might be in the property, which is essentially the difference between what you owe and what the house actually is worth, and give it to the buyer.
-Be wary of contingencies. There will be some sort of clause or other that will allow them to get out of the contract.
-They’re not going to ask you to do any repairs, but in the first place your house will not need many or any repairs.
-These people are usually not inspectors, but they may have a strong idea about houses as they look at so many. They may seem to know about home-building, but they just talk.
– Regardless of the house’s condition, they’ll tell you that it has to be changed, or that it’s not up to code. You may have a 2-year-old roof with 30-year shingles, for example, and they’ll tell you the shingles are curling up, and they will need to repair it. It won’t be real, but if you don’t know how to assess a roof then you might believe it. Or you could have older windows that work perfectly, but they’ll recommend replacing them. All of these items would of course have a cost they must factor in the price they sell.