Should I Sell My House to a Home Buying Company?

Deciding whether to sell your house to a home buying company can be a difficult choice. For the typical homeowner who is selling their primary residence, the answer is often no, you shouldn’t. If your home is in good condition and your primary goal is to maximize the equity you’ve built up in your home over the years, you should not sell your house to a company that is offering a quick cash payout. Doing so will typically garner you offers that are 10 to 30 percent lower than your home’s actual market value.

Not every home selling situation is clear-cut. There are many scenarios where people need to seriously consider selling to one of the cash-offer home selling alternatives. For example, it may be preferable if a home is in such a state of disrepair that a lender would only approve a mortgage if tens or even hundreds of thousands of dollars are invested in overhauls. Some common examples include homes that have:

• Broken HVAC systems
• Severe mold problems or water damage
• Suffered serious damage from hoarding or abuse
• Severely damaged roofs that require full tear-off and replacement
• Failing wiring or plumbing that requires full replacement
• Sinking foundations or catastrophic basement or crawl space issues
• Location-related challenges, like being in extremely high crime areas or surrounded by vacant and condemned properties

In scenarios where buyers would not be able to get a mortgage for the property or it is simply too difficult to find buyers who are interested in the property without significant repairs and renovations, selling to a home buying company may be preferable.

These businesses make money by buying homes for far less than market value, which is why it’s usually not the best option for most homeowners.

The traditional home selling process with a skilled real estate agent does not have to take months. At 72SOLD, we’re committed to getting home sellers higher-than-average offers within eight days of listing their home. If you don’t want to lose 10 to 30 percent of your home’s market value but need to sell your home fast.

Types of Home Buying Companies

iBuyers: A recent technological innovation, made possible by algorithmic pricing tools and online platforms, iBuyers make fast offers with the absolute minimum of human interaction. These can potentially be closer to market value than some of the other methods but will usually be between 10 and 20 percent lower than what you could get through the normal home selling process. They will also add steep fees that can account for up to 10 percent of the home value. Real Estate Investment Firms: These types of firms typically buy homes for cash in order to rent them out to tenants or renovate and resell them. They often provide cash offers for homes in any condition, which can make this an attractive alternative for people who need to sell a home that’s in particularly bad shape. House Flippers: These are often individuals or small businesses that acquire houses for less than market value in order to repair and renovate a home before reselling it. They also specifically look for homes that need significant work, although they may have some standards in terms of the extent of damage or location. Buy-and-Hold Investors: These are investment firms that buy properties to rent them out over longer periods. They can potentially pay close to market value if the home is in good condition, and it’s located in an area with a particularly strong rental market. How close these home buying companies get to paying full market value does vary based on their business model. It often depends on their standards and the long-term plans they have for the property. If you truly must use a home buying company to get rid of a property, it will be in your best interest to consult with several different options to ensure you’re losing as little equity as possible. Is There a Faster Way to Sell My Home the Right Way?

72SOLD leverages an innovative system and strategies to identify and reach qualified local buyers more quickly and efficiently than competing companies. We couple this technology with effective marketing tools and pricing strategies to generate a sense of scarcity and competition among motivated buyers. Our process is designed to generate bids quickly and encourage competing bids. Third-party studies show our median sale price is 7.8 percent higher than the average within any given area’s local MLS.

If you want to learn how quickly your home can sell for market value or higher, use our website to get our price for your home today.