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Things to know about cash home buyers in Sacramento

The business of buying off-market homes has boomed with alternatives for those of us looking to sell your home fast and as-is. The traditional home buying process of preparing your home, listing it and waiting for the right buyer with the right price no longer has to be the usual selling standard. There is a menu of options of companies that buy houses and knowing the business model for each avenue of buyers is the best way to decide which route to take.  

When working with a cash homebuyer in Sacramento, you don’t have to worry about maintaining your home for lengthy inspections and showings or hidden fees that appear on closing day. With the rise of new property investors and real estate technology services, the home selling process has become the easiest thing for homeowners looking for a quick sale. 

Clarifying the Terms

Anybody has the power to pay for a home with cash in hand regardless of whether or not they are buying a house through an agent or off the market, however, that is different from someone known as a cash homebuyer. 

When you sell your home on the market, you can receive cash offers from buyers who aren’t using a bank to finance the home with a mortgage. But this type of buyer requires the homeseller to put their home on the market, wait for the offer and then go through the task of closing. Although there are many benefits to selling your home in the traditional sense, this is setting you up for a different set of expectations as the homeowner because your house has to qualify to be on the market and meet the criteria to do so. 

A cash home buyer is someone who doesn’t go through the multiple listing service and they likely aren’t buying the home to become the new resident of it either. Rather, they buy houses for cash as an investment, buying it as- is and then undertaking the renovations or upgrading processes to turn around and sell it or rent the property. They sometimes advertise themselves via “we buy houses for cash” signs.  

5 Types of Cash Homebuyers 

1. Off-Market Buyer 

An off-market buyer fills in the gap for people needing to sell your home for cash without investing money into making it “move in ready”. These buyers purchase homes that are not listed through real estate agencies. These are the people that come in and offer fair pricing for your home as-is without having to put in the time, money, and work into the home before making a sale on it. On a more personal level, this is normally someone who works with you in your unique situation. Someone is sent to see your property giving you an equitable price, striving for a low maintenance process with minimal costs and fees associated with service and closing. 

2. iBuyers 

When you google search, “cash homebuyers near me”, iBuyers might be the first ones to pop up. iBuyers, also known as instant buyers, are online home selling portals that generate an evaluation of your home technologically that produces a competitive offer. The house buyer website uses data that compares the value of other homes within the location of the home you are selling and other market information to construct this offer price to you, however, they do so without seeing the property at hand first. Oftentimes this offer price that attracts their customers to go further is then later reduced by repair costs, service fees, and other expenses that may run between 5 and 15 percent. In order for iBuyers to make a profit, they must turn over a significant amount of homes (sell quick homes) which also means they rush the selling and closing process. This means iBuyers aren’t interested in you spending time and effort into staging the home, however, they expect your home to be close to a market-ready condition or else they have to negotiate repair charges, deducting from the amount they initially said they would pay for your home. iBuyers could be the best companies that buy houses for cash for your circumstances, or they could also be the worst option for you, either way, it’s important to note the process they take.

3. House Flippers 

A lot of times fixer-uppers and house-flippers make cash offers for houses, however, they are on the lookout for specific types of homes. Flippers are generally looking for homes that are priced well below their market value in order to invest in upgrades and renovations to flip the home. These home buyers are different from iBuyers and other off-market buyers because they aren’t just taking into account repair costs alone; they plan to make rigorous changes to the home, sometimes to the layout itself, to increase the market value significantly to resell it. For this reason, they don’t look at the home to see what needs to be fixed but what can be changed and they move fast. House flippers don’t have a lot of time to spare between the offer being accepted and closing the deal because similar to iBuyers, they are the type that buys houses to make money by quick turnarounds. They usually rely on hard money loans as well, so their motivation also comes from paying back what they owe. Since a lot of flippers are in the business with the motivation to make a large profit, it is important to be on the lookout for predatory buyers whose intentions aren’t in giving you a fair and honest price for your home. 

4. Buy-and-Hold Investors 

People in the buy-and-hold business are buying homes to use as passive income, not to live in it or even to resell it (right away). These people or companies own enough properties to generate income from renting them out in some way. Buy and Hold investors are generally more flexible with time, closing and pricing and see your home as an investment rather than something to resell right off. This is because they are looking for homes relatively close to their other properties or where they’re located so that they can easily oversee their properties. 

5. Investor Marketplace

Cash home buyers who place your home onto an investor marketplace site expose your home to a number of other property investors that bid on the property making it a competitive home buying process. As a result of the competing aspect, the house can sometimes sell for a higher off-market price compared to other home selling avenues. Although this is a convenient marketplace where your home has the chance to sell for the maximum amount, choosing the cash home buyer isn’t always the easiest and these marketplaces are servicing you by putting your home out there for several offers to come through. Like every other cash homebuyer, this marketplace of home buyers isn’t expecting your home to be move-in ready and upgraded, they are just interested in investing in it for whatever their individual purposes are to deal with the home once it is theirs. This is a very doable method of home selling to sell house as-is for cash. 

What to Expect When Working With Any Cash Homebuyer 

Most off-market buyers are businesses and not individuals who are looking to put the time and money that home sellers may not have into repairing and modernizing the home to re-sell it for profit. They take the stress of preparing your home for someone else to move in right away off of your shoulders. When selling your home to any cash home buyer, the process should feel agreeable and similar to working with a market agent. Whoever you decide to work with should respect your requests and your time, communicate and respond to you in a comfortable way since this is a mutual business exchange. If you ask for a breakdown of the numbers, they should be able and willing to provide one to you. 

Since there is no qualifying certification to claim that someone is a legit and honest “we buy houses” buyer, you should only do business with those that conduct themselves professionally. With that being said, there are a number of red flags to be on the lookout for. 

  • If a company asks you to transfer the deed before closing
  • When the offer agreement has already been signed, but a company is continually attempting to update it or provides you with a list of unwarranted changes to the offer after inspection
  • Purchasing your home without seeing it first 

Make sure that you verify the individual or business online using Google, Yelp, or the BetterBusinessBureau. Read the contract thoroughly from any buyer before signing and agreeing to do business with them. Doing your part to gather the knowledge of the scams people can pull is important in ensuring that you are doing business securely.