sale to fast-cash 'rehabber' OK for some
Real Estate Adviser,
Is it a good idea to sell your house through a "fast cash for your house" agency? I ask because my home requires a lot of repair work. How do they operate? Are they on the up and up?
-- Fast Eddie
These services have a legitimate niche in the industry, especially
for distressed or time-constrained sellers. They are not unlike
other rehab-and-resell businesses, in that they try to buy well
below market value and resell at market value.
The vast majority of such companies are "on the
up and up," although there are a handful of unsavory ones who
prey on the desperate or unwitting by offering them only the equity
in their homes and nothing remotely close to market value.
The only knock on the better-known national and regional
chains is that their home purchases too often are converted into
rental units, which reduces the percentage of resident-owners in
areas where residents are trying to maintain neighborhood integrity.
In that respect, however, they are not unlike other home investors
If you plan on selling to one of these companies, be prepared
to discount your home significantly. While these firms are slow
to offer up trade secrets, business stories in recent years indicate
that such house investors pay between 10 percent and 35 percent
of what a house would fetch if it were in excellent condition. As
a rule, nicer homes in good neighborhoods will yield more, and beat-up
homes in bad neighborhoods will yield less.
Sellers who have the time, energy and wherewithal
to fix up their places themselves and sell directly to buyers through
an agent or by FSBO, or for sale by owner, will likely fare much
better on sale price.
But many homeowners, for any variety of reasons, don't
want to endure that process. There are many reasons behind an attempt
for a quick sale.
||Reasons that owners attempt a quick sale:
And there are some advantages to going this route.
|Advantages of a 'fast-cash' sale:
When these buyers take over a house, they will typically
add new carpets and paint, fix holes in the wall and make other
cosmetic touches. But they might also have to upgrade electrical
and heating/air-conditioning systems and do other major fixes to
make the place palatable to a renter or another buyer. Obviously,
the more they have to do, the lower their offer will be to you.
So if you've got an as-is home that you want to move fast, then "fast-cash" is something you might consider. But make sure you research the company thoroughly and run a Better Business Bureau search on them before signing on the dotted line.
Good luck on your sale.
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