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The Rise of Cash Buyer Companies

More and more cash buyer companies are popping up these days, as more people find themselves in need of a quick and easy sale. These companies offer a great solution for those who need to sell their home quickly, or who may not meet the requirements for a traditional mortgage. Cash buyer companies can often close a sale more quickly and with less paperwork than a traditional sale.

There are many reasons why someone might want to sell their home to a cash-buyer company. Maybe they need to move quickly for a job or family situation, or they may be facing foreclosure and need to sell before their home is auctioned off.

  • Cash buyer companies offer a fast and convenient way to sell your home
  • They will buy your home as-is, without the need for a mortgage or bank loan
  • This can be a great option for those who want to sell their home quickly, or who may not meet the requirements for a traditional mortgage
  • Cash buyer companies can often close a sale more quickly and with less paperwork than a traditional sale
  • However, cash buyer companies typically pay only 50% of a home’s fair market value, so it is important to do your research before choosing one
  • If you are considering selling your home to a cash buyer company, be sure to compare offers from multiple companies

Some background on Cash Buyer Companies

Investors buying homes for cash after which selling them for a profit is no venture that is tiny and housing market data shows that these types of acquisitions are really on the rise: The National Association of Realtors (NAR) reports that investors accounted for 15% of house sales in July 2020, an increase from 11% the year prior.

You can consider selling your property to an investor the same as selling your vehicle to the dealership. You can certainly do it yourself if you’re looking to sell your car. Do some repairs then place your car for sale on Craigslist, organize your own test drives, and handle all the paperwork yourself. However, it’s easier to just go to the dealership once and let them buy your car for a fair price. These cash buyer companies essentially do the same. They want to buy your property because that’s what they do full time. They have the funding and won’t back out of the deal. No matter the situation.

cash buyer companiesWho are these Cash Buyer Companies?

They can be individual investors or large companies whose sole purpose is to invest in real estate. Through their years of experience and connections, they are able to obtain properties by offering fast, direct payment to the sellers without backing out of the deal.

In general, selling your house to a cash buyer allows you to skip the home prep, showings, and staging hassles and arrange a far easier closing that is flexible to your time. Leaving you the space to coordinate the purchase of your next residence.

But not all cash-buyers have the same conditions. In fact, these buyers have evolved into a couple of larger categories:

Buy-and-hold investors

Buy-and-hold investors purchase homes and transform them into rental properties.

Within the category that is buy-and-hold, you have individual investors who purchase and rent properties for passive earnings. The quintessential example is Invitation Homes, a subsidiary of Blackstone that operates in 16 markets across America on a bigger scale, you will find institutional investors that purchase at least of 10 leasing properties per year.

In Q2 2020, 1.4% of single-household home and condo sales had been offered to investors that are institutional in accordance with ATTOM Data Solutions.

As a vendor to buy-and-hold investors, you’ve got more closing that is flexible and you’ll likely get better pricing than if you were to sell to a house flipper.

House flippers

Another cash home buyer is the so-called “house flippers”. They aim to buy properties at a low price, renovate them quickly, and sell them at a higher price. Usually, they don’t live on the property during the renovation process.

The typical house flipper is an experienced do-it-yourselfer who knows how to do most, if not all, of the work needed to improve a property. He or she may be an investor who has been flipping houses for years or someone who just got the bug and did it once before.

The house flipper is usually looking for a property that he or she can buy at a low price, put some sweat equity into and then sell for a profit.

The most experienced house flippers know how to find properties that need only cosmetic repairs. They also know which repairs will add the most value to a property and which ones are not worth the time and money.

For example, a house flipper might buy a property that needs a new roof and windows. The house flipper knows that a new roof and windows will add more value to the property than, say, a new carpet or painting the walls.

The house flipper also knows that new roof and windows are expensive repairs that will take time to complete. Therefore, the house flipper will factor those repair costs into the price he or she pays for the property.

iBuyers

iBuyers are companies that use technology to streamline the home buying and selling process.

The term “iBuyer” is short for “instant buyer.” iBuyers are real estate companies that use technology to make cash offers on homes without the need for a traditional home sale.

Some of the most popular iBuyers include Opendoor, Offerpad, and Zillow Offers.

iBuyers are often able to make cash offers on homes within 24 hours of receiving an offer from a seller.

The use of technology by iBuyers has made the home buying and selling process more efficient. For example, iBuyers typically do not require a home inspection, which can save time and money.

iBuyers also use technology to price homes. They use data to compare similar homes that have recently sold in order to make a cash offer on a home.

The cash offers made by iBuyers are often below the asking price of a home. However, the offers are typically higher than the cash offers made by traditional home buyers.

iBuyers typically charge a service fee of around 7% of the final sale price. This fee covers the costs of using technology to streamline the home buying and selling process.

Based on a study conducted in 200 U.S. towns and cities early this, iBuyers acquired 1% of all home acquisitions in those markets in the 2019 year. That may sound like a small portion, but it’s almost double that of the prior 12 months, indicating that the growing wide range of sellers is shifting to your rate and convenience of this model that is reasonably new.

Although COVID-19 suppressed iBuyer purchasing just as much as 90% — and 2020 iBuyer activity will shrink in comparison to the 12 months prior because of this — iBuyers are cautiously re-entering the industry and will probably be a long-term fixture of the greater estate landscape that is genuine.

home cash buyer companiesReasons people sell to cash buyer companies

  • Family Emergency
  • House needs repairs
  • Behind on payments
  • Relocating
  • Divorce
  • Problem Tenants
  • Unwanted Property
  • Inherited Property
  • Vacant House

Benefits of Cash Buyer Companies like Spectrum Houses

  • No repairs needed
  • $0 agents commissions
  • Hassles free and headache free
  • Fast closing
  • Help with your move
  • One on one transaction
  • Multiple options to get you the most cash

Conclusion

Cash buyer companies offer a fast, easy way to sell your home. These companies are typically able-bodied investors who are looking for homes that need only cosmetic repairs. They will often pay cash and close the sale more quickly than a traditional sale. If you’re thinking of selling your home, it’s worth considering cash buyer companies as an option. Call us or email us today to receive an offer. 786-309-2338 or [email protected]

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