If you’re thinking about selling your house, today’s seller’s market means you’re certainly not alone. But you don’t necessarily have to go through the trouble of finding an individual or a family to buy it. Instead, you can consider selling directly to a company that will pay in full, upfront — an all-cash deal.
Pros of using home buying companies
There are different nuances to the way companies that buy homes for cash operate, but they all generally have the same simple promise: There’s no need to wait for a buyer to secure financing. The business model comes with plenty of upsides for sellers:
- No waiting: The process is fast — in fact, with some companies, you can simply enter your address online and receive an instant offer within a few minutes. If you’re on a tight timeline, need to relocate as soon as possible or need the cash quickly, that kind of speed can be a big benefit. It basically eliminates the work of preparing to list, hosting open houses and waiting for offers to roll in.
- No delicate negotiations on price or timeline: “You also know how much you’re going to sell for, and when you’ll sell,” says Jennifer Dohm, vice president of brand communications at Offerpad, which buys houses for cash and allows sellers up to 90 days to close. “This empowers people who are looking to buy another home with the knowledge of what they’re working with for their next offer, or to make life decisions with a solid timeline of their choosing.”
- No real estate commissions: With traditional real estate transactions, sellers foot the bill for their agents and a buyer’s agent, which typically takes 6 percent away from the final sale price. Most cash offers have no agent commission involved. There can be other fees, however, so it’s important to read the fine print.
- No need to pay for work before listing: Many sellers invest extra money in their home before listing it for sale, in the hope of attracting a higher price. That might include small repairs, bigger upgrades or home staging to make the property look picture-perfect. When you sell your home to a company that pays in cash, there’s no need for that. “With a cash offer, there’s no cleaning, updating or repairs needed — no showings at all,” Dohm says.
- No worrying that the deal might fall through: If you’re selling to an individual, there are plenty of scenarios in which the sale might not actually happen. Perhaps they decide to back out after a home inspection uncovers an issue, or maybe a lender doesn’t approve their loan. If you receive an offer from a company that’s paying in cash, you can feel fairly confident that the deal will get done.
What types of companies buy houses for cash?
There are a few different kinds of companies that typically make cash offers on homes:
|Company type||What they offer|
|Fix-and-flip||House-flipping companies want to buy properties in bad shape, fix them up and sell them for a profit. Often, these companies advertise that they buy houses “as-is.” If your property is in serious disrepair, this might be an attractive option.|
|Buy-and-hold||On the other hand, buy-and-hold companies are focused on keeping the house and making it into a rental property. Rather than turning an immediate one-time profit by selling, the house becomes a steady stream of rental income.|
|Trade-in||These companies are designed to help you buy your new home before you actually sell the one you’re living in.|
|iBuyers||The “i” in iBuyer stands for instant. You’ll likely enter your address in a search bar, and the company’s algorithm will generate an offer for your home within a few minutes. It’s meant to feel as easy as traditional e-commerce giants like Amazon.|
Companies that buy houses for cash
Traditional cash buying companies
We Buy Ugly Houses
As the name implies, this company is happy to buy your house even if it doesn’t look list-ready. The “ugly” isn’t just about physical appearance, either. The company buys properties with high-interest financing that isn’t working for homeowners; houses with bad memories due to divorce or death; and a range of characteristics that might make living there less than desirable for the current owner.
HomeVestors operates more than 1,100 franchises around the country. The company has collectively bought more than 125,000 homes since its founding in 1996.
We Buy Houses
This company has more than 200 independent real estate investing offices across more than 30 states. Rather than operating purely online, after you enter your address a local representative comes to your home in person to assess its value and make a cash offer.
This regional company buys an average of 25 homes each month for cash in Pennsylvania, Maryland, northern Virginia and Washington, D.C.
HomeGo, however, buys a lot of homes for cash — one every 20 minutes, according to its website. If you really need cash fast, the company offers a valuable benefit: Closings in as little as seven days.
I Buy Houses
I Buy Houses is a network of individuals and companies that want to buy homes for cash. The company acts as an intermediary, connecting homeowners who want to sell with interested members who might make an offer to buy.
Another network of individuals and investors — but with Sundae, you’ll list your home on the company’s network, and it performs an in-person visit. Four days after a home inspection is completed, it presents multiple cash offers from multiple buyers for you to choose from.
iBuyers and trade-in companies
Opendoor aims to buy homes with valuations between $100,000 and $600,000. The company also primarily operates in major metro areas, so it’s not a good option for homeowners in rural areas.
HomeLight’s Simple Sale offering values your home based on data from your neighborhood. You can get paid in just 10 days, and you have up to 30 days from closing to move out.
You might already be using Redfin to compare prices or look at listings, but the real estate brokerage also operates a service that makes cash offers for homes. Note, though, that RedfinNow does charge service fees, which can range from 5 percent to 13 percent of the value of your home.
Offerpad’s Express offer service gives you an offer within 24 hours and up to 90 days to move out. If you qualify for the company’s Flex service, you can test the open market with a cash offer as a backup. Dohm adds that the company includes a free move within 50 miles of your old home, too.
Orchard doesn’t really buy your home for cash, per se. It gives you cash — up to 90 percent of your current home’s value — to buy your next one. Then, it takes care of sprucing up your old home and listing it after you find a new place to call home. It’s all designed to help eliminate paying two mortgages at the same time or trying to buy a home while selling your old one. It’s only available in select metro areas, including Atlanta, Austin, Charlotte, Denver, Phoenix and Seattle.
Similarly, Knock is another company that allows you to buy a new home and then sell your old one. It’s not actually paying cash, though; the company underwrites a new loan for you. The service — known as the Knock Home Swap — is available in 16 states.
Flyhomes is another company that helps customers buy a new home before selling the one they currently live in, and like Orchard and Knock, it’s also not really a cash offer. The company has a mortgage lending operation, so you’ll have a short-term loan – plus the option for a long-term loan for your new mortgage once your old home sells. The company also operates only in select markets, including the San Francisco Bay Area, Southern California and Boston.
Should you sell your house for cash?
A cash sale might move much quicker, but a traditional sale is more likely to fetch a higher price for your home. If you’re trying to figure out whether you should sell your house for cash, it ultimately comes down to two key factors: What kind of condition your house is in, and how long you can afford to wait. If your house needs serious repairs that you cannot afford to cover or you need to sell immediately, companies that pay cash for houses are a good option. If the house is in good shape and you have time to spare, you are likely to make more money in a traditional sale, with a knowledgeable real estate agent on your side.
If you want to explore your options, you can always see what some cash buyers are willing to offer to get a sense of what you could earn in a speedier deal. Then, talk with a real estate agent to get a professional opinion on what they realistically believe your home could command on the open market. Do not sign a contract with an agent first, though; you may be bound to pay them a commission even if you opt to sell for quick cash.