“We’ll Buy Your House for Cash” - Legitimate?

People ask me all the time about the letters and postcards they receive in the mail claiming that someone will buy their house for cash. Oftentimes, these buyers will claim that they’ll purchase your house as-is with everything in it, too. These buyers’ ideal target is someone who is in financial trouble and needs cash from their equity quickly or someone who might have deferred maintenance projects on their home that they don’t want to hassle with or have the money to do prior to a sale.

If you receive an offer like this, is it legitimate? Most likely, yes, it is. If it’s legitimate, should you consider the offer? The answer to that is, “It depends.”

The cash buyers who make these offers are usually real estate investors of some type. They might be looking to flip your home (fix it up and sell it for more) or add your home to their rental portfolio. Regardless of the type of investor, what is important to know is that a “cash buy” investor is looking to make a profit. How do these buyers make a profit? They make a profit by offering you much less than market value for your home. Most likely, the offer they make will be 30-50% below market value.

Just to remind you, their ideal target seller is someone who needs cash quickly or wants to sell their house as-is. If you have these goals, taking advantage of a cash investor-buyer’s offer might work well for you. But I think it’s important to take the time to consider all of your options before agreeing to that offer.

Because we are in a seller’s market in our area, it is highly likely that you can also put your house on the market at market value (30-50% more than the cash buyer program) and find a buyer who will help you accomplish the same goals of selling as-is and doing it quickly. If you really are in need of fast cash, wouldn’t it make more sense to get all the fast cash you can out of your house? 

I worked with sellers a couple of years ago who were strongly considering using a program like this to sell one of their properties that needed some work. Thankfully, they reached out to me for a second opinion. We listed their home for significantly more than the cash buyer offered and received competing offers within a weekend of showings. The buyer closed quickly and the seller was happy to have made a much higher profit and reached their goals of selling as-is very quickly.

At Jess Lex Homes, we are a strong advocate for doing your research before making decisions about your home. You should consider all your options by meeting with a real estate agent, the cash buyer, and others. Take a look at the cash buyer’s offer with a real estate attorney and make sure you understand the fine print before signing. Run the numbers with an agent for what you’ll receive in proceeds selling at market value by hiring an agent versus taking advantage of a cash buyer program.

Knowledge is power and may quickly and easily make your decision clear.