I live in California. Lately it seems no matter where I go, I see signs that read, "Will Buy Your Home For Cash" ... I've even see some TV ads and bumped into a website once. Ads stress that they'll buy any house in any condition for a "fair" price.
Does anyone have any info regarding these kinds of offers?
2006-10-31 04:15:23 · 6 answers · asked by mutt_buffer 3 in Business & Finance ➔ Renting & Real Estate
These are investors looking to buy your house for nothing.
Here is how it works. They offer you a low price. Then they give you a good faith deposit of a dollar. They have you put up 20% out of your equity as their 20% down. Now they get financing for the other 80% It's easy if you already have 20% or more down. Now you get paid the balance less the 20% you loaned out. So you are carrying a second subordinate to the first. If this person doesn't pay the mortgage and it forecloses you loose everything. Unless you know and foreclose first.
Their goal is to put a renter in who will put a down payment of 10% to them. This is used as a way to sell a house to someone who can't get a loan. They have 3 years to turn it into a purchase or forfeit the 10 %. If they turn it to a purchase the 10% goes toward their down payment.
So essentially they got you to finance the house they invested a dollar, sometimes more, and they they got a renter to make all the payments on the first and the difference of the second. They use the 10% to pay down the second. They send you a payment once a month on the 20% they borrowed. Sometimes they want a deferred payment for three years. This gives them free cash flow.
If all goes right they bought real estate for nothing more than a dollar. If it goes wrong they walk away you loose the home have a foreclosure and are screwed.
This is known as predatory lending and may be illegal but difficult to prove.
Others just buy a home for 30% below Loan to value ratio. They are legit but you won't get much for your house. Always use a Realtor. You wouldn't take out your own apendix would you?
2006-10-31 04:33:06 · answer #1 · answered by Anonymous · 3⤊ 1⤋
They are usually legitimate. This is quite often a group of investors who pool their money to buy properties then 'flip' them for resale. They target people who are desparate to move or get out from under a mortgage before it's foreclosed. Consequently they will offer you far below fair market value for your home. Most people can't afford the offer because they will either walk out from the deal with no cash in their pocket or possibly even losing money. But it sometimes beats going through foreclosure.
2006-10-31 05:14:22 · answer #2 · answered by Realtor Jim 2 · 2⤊ 0⤋
You will see a lot more of these offers, as the housing market is slowing down. Its shifting more towards a buyers market, with more houses for sale than buyers.
These companies typically pay substantially less than you would get through a normal sale through a real estate agent. But the plus for the seller is that they sell NOW and dont have to wait several months or longer looking for a buyer. If someone has just bought a new home or has to move with their job, they may not have time to sell through a normal agent.
2006-10-31 04:27:19 · answer #3 · answered by Kutekymmee 6 · 1⤊ 0⤋
They are legitimate but they will pay you much less than you would get if you used a regular real estate firm or sold it yourself. These companies specialize in distress sales where there is a need for immediate cash because of a divorce or death or if the house is in very bad shape. It would be a better idea to fix it up and make more of a profit.
2006-10-31 04:18:48 · answer #4 · answered by notyou311 7 · 1⤊ 0⤋
aka coffin chasers. most r legit, but who wants a "fair" price when you can get a competitve price and higher? Fair to whom? you or me? you should be asking. they prey on people in desparate situations. there is nothing fair about it except you get cash now and they will flip that house and make a $$$$$.
go thru a realtor and get top dollar for your home! It's only fair :P
2006-10-31 19:59:54 · answer #5 · answered by MIABELLA_C 2 · 1⤊ 0⤋
I am always suspect of people who adviertiselike that on the back window of their car.
I prefer the ones that say "I Buy Houses", as i go up and change one letter, so ti says "I Buy Horses"
2006-10-31 04:17:28 · answer #6 · answered by Anonymous · 1⤊ 0⤋
i saw an infomercial on these. these businesses buy houses at below market prices and flip them for a profit. they really seem to target people who are in danger of losing their house or have to sell fast, even at a loss.
it's the "fair price" that's the kicker. your idea of fair & theirs may be totally different.
if you want to sell your house yourself, you can list it for free at www.fourwallsandaceiling.com
2006-10-31 05:59:44 · answer #7 · answered by HoyaHorns 2 · 1⤊ 0⤋