Why Sell to House Buying Companies? A Guide to Your 3 Primary Options in Selling in San Diego with or without Making Repairs

by | Apr 26, 2018

A lot of people see “we buy houses” signs and ads about companies that buy houses for cash, but aren’t really sure how legit these companies are and also…may not understand what it really means. For some, they might automatically assume that there is a catch and that selling to a cash buyer means less money in their pockets. This isn’t uncommon and a typical assumption, especially if a person is not really familiar with the difference between selling traditionally and direct to a buyer. Most homeowners feel most comfortable with the option of selling through a real estate agent who will represent them during the transaction, which is why it’s the most popular mode of selling. And in a lot of cases, this makes perfect sense for homeowners. But, it isn’t the only option and may not be the best potential solution either. We’re going to walk through what it really means to sell to a cash house buying company to YOU, the seller.

While not all home buying entities are created equal, there are some things you will find in common with all (or most) direct sale transactions. As it’s made known, house buying companies do typically offer to pay you cash for your house. In addition, because they have the capital readily available, they also usually offer to close as quickly as you need (in as little as one or two weeks). Plus, selling direct to a cash buyer means there is no need for an agent in the transaction, which means you won’t have to pay any agent commission fees. While there is more to it, these are the common denominators you will usually find in most cash house buyers.

But, why choose to sell to a house buying company?

For some, it’s time and the need for a quick sale. For others, their home is pretty run-down or needs repairs in order to be market ready, but they don’t want to spend the time or money to get it there. For the rest, it may just be for the sheer convenience and they’re looking for an easy sale. But, contrary to popular belief, homeowners won’t net less in profits from selling to a cash buyer. Every scenario is different, but we have worked with tons of homeowners in San Diego County who have chosen a home buying company like ours because of the opposite…they would net MORE selling the home as-is to us than listing it on the market. With that, we wanted to help explain how this could be the case and why some homeowners choose to sell directly to a cash buyer.

How to Determine if a Home Buying Company is Right for You

There are a few different things you should consider when looking to sell your house. You typically have the following three options in a home sale: 1) sell traditionally with a real estate agent, 2) sell the house on your own or FSBO, and 3) cut out middlemen and sell directly to a cash buyer.

When we meet with homeowners about a cash offer for their property, we come with ample information and resources to ensure that the seller is educated and fully aware of ALL of their options in selling. First, we start by providing information on surrounding comps (comparable properties) in their neighborhood. A home buying specialist will walk through comps that are very similar to a seller’s home in regards to condition, size, location, and amenities, as well as a separate list of comparable homes of similar size and lot position, but with new upgrades and amenities. Since not many people choose to sell FSBO (especially if you’re a homeowner looking for a simpler sale), we walk through the following three main options or routes to take in selling:

  1. Selling the house as-is with a real estate agent. A home buying specialist will walk through what your property could sell for on the open market if you listed it in the condition it’s in and without any upgrades. Rather than presenting you with numbers out of thin air, the specialist will instead rely on the DATA provided on the list of comparable properties so that you can see, too, what homes are selling for and how we came up with that offer price. Then, the following deductions are made to that asking/offer price: agent commission fees, closing costs, holding costs (time to sell and hold onto the property), and any requested repairs. Then, your “net” or pocketed amount is highlighted at the bottom (offer price – fees and closing expenses = net).
  2. Repairing the home then listing with an agent. Using the other list of properties in the area that have been renovated and updated, you will be presented with what your potential inflated offer price could be if you sell on the market post-renovations. From that higher price, the following deductions are made: costs and time to renovate and repair the home, agent commission fees, closing costs, and holding costs (time to sell and hold onto the property). Then, what you pocket at the end of those expenses will be displayed at the bottom. If you have the money and time to invest in the needed repairs and renovations, this option can yield the highest pocketed amount, but may also take the most amount of time.
  3. Selling the house as-is to a direct cash buyer. The third scenario you are presented with is a cash offer. There are no deductions made from the cash offer as it is 100% net to you, the seller. The cash buyer already factors in paying for closing costs, commission fees, and repairing the property on your behalf. So, while the “offer price” will be lower than the presented offer price if you sell with an agent on the market before or after you make repairs, what you NET is often times not all that different. In some cases, it’s a little less than what you’d net on market. In many cases, it’s actually more than what you’d net on-market if you listed the home as-is with an agent. A lot of this depends on the number of repairs your home needs and the shape it is in.

What would you “net” in selling to a cash home buying company?

If you like the sound of the process described above and are curious to see how much you would profit from the three different options in selling, then consider giving our team of experts a call. Unlike other house-buying companies, we will be completely transparent with you about your options and will support you in any decision you choose to make (even if that means not selling with us). Selling to a cash home buyer is not for everyone. If it’s not for you, we’ll be the first to let you know and then point you in the right direction.

What is Shrinkflation? Impact on Home Values

What is Shrinkflation? Impact on Home Values

Shrinkflation is is a unique period that occurs when the price of a house remains the same, but the amount of square feet you receive is less. As inflation increases raising the market, homeowners and companies are trying to recoup their investments. According to...

read more

Sell Your House Direct Is Your Trusted Cash House Buyer

Get An Offer Now

We are ready to help you, just like the thousands before you!

You have Successfully Subscribed!