How do those " We buy your house" places work?

Question

I was wondering about those we buy your house buisnesses and how they work. Do they give you appraisal value for your house? Or do they try to give you just what you have in the mortgage? Do they do it by what the county market appraisal is?
I have a house I owe little on and I feel would appraise for what I would like to put in my pocket. Is it worth looking into one of these places and not bothering putting it on the market and playing the waiting game? Or is it worth playing the waiting game and the money I would spend in replacing the few things that need to be replaced like the carpet and some new paint, because thats really all that needs to be done.
How much more money would I really gain in this market if I were to play the waiting game, compared to the "we buy houses" option?

Answer 1

Hi,
I was a mortgage broker for about 6 years, and just got out of the business about 6 month's ago, because the market is so bad right now. What i can tell you is this. the " We buy your house" places, will use what is typically called "Hard Money from investors to buy your house with cash very fast. The problem with these places is that they usually will only give you 60% of your homes appraised value, and that is off of there own appraisal which they usually will bring in about 10% below market to pad the deal. So here is an example:

Your home is worth 200k on the appraisal that you had done

They will bring the appraisal in that they do @ 180K.

Then they will give you an offer of about 60% of there value

In this case they would offer you around $108,000. for your home. This is a really bad deal for you, but for some one that only ows 50-60k on the home and is a few months behind on there mortgage payment it looks like a great deal.

It sound to me like from what you have writen above that you are not hurting for money. I can tell you that painting and carpet can make a huge diffrence to the value of your home, along with good curb appel. If the house looks bad when they pull up they will not give the home a really good look when they get in. I would suggest that you spend a few thousand and do the carpet and some new paint! Good Luck!!

Answer 2

They buy houses for WAY below market value. They are buying the house so that someone can pay off their mortgage and get away. They may not even give you what you owe on the mortgage if the place is in really bad shape and you have an upside down mortgage. These places are not for someone who has taken care of their home and want to sell it an move to another home. They are the last choice for people in a terrible situation.

Answer 3

these people who buy your home offer several options few make sense.

some say they are investors and ask you to sign an agreement that says basicaly they will buy your home at a set price on a subject too agreement basically what they are doing is getting you to agree on a lower price then they sell your home and make a profit on the differance. (fact is many times you could have just sold your home and made more)

then there are the second type they offer you about 50% of the value of your home and fix it up and sell it for even more money!

the third is in my opinion the saddest but totally legal! used for people facing foreclosure! they get you to sign a quit claim deed with the promis to pay off your back payments so you dont have a foreclosure on your record. they usally give you some walking money to get an apartment and move out a few thousand. and fix the home and sell it paying off your mortgage they basically get your home for a few thousand dollars they pay you and your back payments. they will either sell or rent the home as the owners once the file the quitclaim deed! i know several investors that do this! they are no longer friends i find this practice very disturbing.

Answer 4

I agree with many of the posts on here....They are marketing mainly to people with few options left - headed for foreclosure who have some equity built in their property. I have friends who do this - it is actually a win win situation for both of them (they make money finding properties for other investors or landlords - and the sellers get out from under their burden without ruining their credit - go ahead - call them "vultures", but even the food chain needs scavengers)...I don't feel your case is like that - I would take out a home equity, if need be - get a general contractor in and make the house "show ready" and put it on the market for a good price - you WILL sell it quickly...ask your broker to not skimp on advertising & it will sell if priced right - even offer to pay a %age of closing costs with a full price offer....you'd be amazed....Best of luck!!!

Answer 5

How they work is to take advantage of people who nothing about finance! Do'nt touch them with a barge pole! Get a good estate agent in to value your home and ask suggestions on how to make it more appealing to prospective buyers.It may already be fine and suitable for someone wanting to put their own mark on the place.If not,be guided by them and do what is neccessary without running up a huge bill. If all you want to do is realise some of the equity in your property,look into re mortgaging at a price you can afford the repayments and staying put.

Answer 6

most people are friendly, at the very least courteous... however I have found over the last 5 years or so people working in the service industry, shops/garages/bars/restaurants have become more friendly and helpful Who are you to call them low-lifes? Also, how can someone be obnoxious "not directly to you"? You are extremely judgemental... NOLA-BOY - I'm still laughing at your answer, it's so well put!!

Answer 7

Most of the people that I have met that do this are investors looking to pick up a house for about half what it is worth.

I recommend that you avoid those people like the plague.

Answer 8

they ussally buy houses that need work or people want to
dump.

Put a little money into them and make them rental
property.