You must have often noticed handwritten signs written in capital letters that there are a few companies who are ready to buy your house for cash. Nowadays as people are becoming internet savvy, another player who is an algorithm-powered tech company called as iBuyers is also making such offers.
Do you know about these new business models? If you too are planning to sell your house quickly then can you go for such options?
Let us try to go into a little more detail about these advertisers who often display we buy houses for cash notices all around. You must understand that these investors who are going to buy your homes for cash and after that will sell for a profit cannot be a small venture.
As per the data, such type of sales and purchases are rising. NAR (National Association of Realtors) has reported that 15% of home sales that took place in July 2020 were done by these investors, which was 11% in the previous year.
As a seller, you will find it very convenient to sell your house if someone is interested to pay you immediate cash. You need not go through time-consuming exercises like advertising, repairing your house to look good, showing to many customers and negotiating, etc.
These cash buyers are individuals who buy houses without going to any lender financing, but all these buyers may not have similar policies. You can divide them into 3 categories:
- Buy-and-hold investors who buy your house and convert it into a rental property.
- House flippers will buy any house in poorer condition at a lower price and renovate it and sell it at higher price.
- iBuyers is a relatively new player who is a instant buyer and uses automated valuation models to offer competitive prices typically for any homes that are relatively in a better condition.
This new business model of iBuyers was doing pretty well before the COVID-19 pandemic. Their business dropped in 2020 but now they are picking up again.
Few options before selling your home
- Compare the offer
If you want to get a good price for your home then first find the market rate and then compare whether such cash for a home deal is offering a good deal.
- Does your house need lots of repairs?
If your house needs too much repair expense then it is better to go for such cash for the home deal.
- Financing is pleasantly different
If you get a buyer who needs finance to buy then it may take a much longer time, but these cash buyers have ready cash.
- You can rent your house too
You too can also decide to make your home into a rental property and earn a passive income instead of selling it.
- Scams too can happen in a house for cash deal
All such cash for a home deal may not be as straightforward as it looks. There can be a scam too and hence check every step with great caution before you decide. Try to read all the finer points of their offer.