More and more homeowners are selling their homes for cash, but many people still don’t have a good understanding of what a home buying company is. The process of selling a home for cash is quite different from what you might be used to, and it’s important to have a good understanding of home buying companies before you make your decision.
Home buying companies are not sales companies. They don’t list homes on the market for sale, and there are no sales agents employed by the company. They don’t make contracts with sellers or show houses to prospective buyers.
Instead, a home buying company is a direct buyer. They are in the business of buying houses directly from the owners for cash. This arrangement cuts out the processes and delays that often accompany a traditional home sale. They make an offer on a home and pay cash.
Rather than sales agents, cash buying companies are property investors. They specialize in buying homes that are distressed or that homeowners no longer want. This may include houses that have been inherited, have been threatened with foreclosure, or have been neglected for some time.
Rather than charging the seller commission and fees, the cash buying company makes money by investing in these properties and repurposing them. Sometimes, the homes are kept for rentals. More often, they are offered for resale.
Cash buying companies may work in both wholesale and resale. In wholesaling, the houses they buy are sold “as is” to other buyers and property investors. Before they can be sold to a consumer, the homes will be repaired and renovated.
Most homes purchased by cash buyers are in need of repairs, ranging from minor touch-ups to major repairs like a new roof or furnace. Some cash buyers will do the work on their own or contract out for it. Others sell the home to a third party who specializes in “fixer-uppers.”
The cash buying company occupies a specialized place in the home sales industry. As direct buyers, they can provide homeowners with a quick sale that bypasses much of the red tape of a traditional home sale. And, they play a role in making good quality housing available for potential buyers.
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