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The vast majority of home sales that take place in this country involve the assistance of a professional real estate agent — 86 percent, according to data from the National Association of Realtors. But if you’re looking for an alternative way to sell your home in California, perhaps an option that’s faster and doesn’t involve making repairs or hosting showings, you might consider a company that proclaims “We buy houses!”
These companies are known for making all-cash offers on homes and are often able to close the deal very quickly. Streamlining the process even further, many “we buy houses” companies also handle all closing paperwork. While these benefits can be extremely valuable if you need to sell your home in California fast, relocate on a short timeline or have an urgent need for cash, this approach may not be right for everyone. And there’s one big drawback: Like iBuyers, cash-homebuying companies typically pay far less than market value for your home.
Types of companies that buy houses for cash in California
There are many different options in the Golden State if you’re interested in working with a “we buy houses” outfit. The market includes national, regional and small, local companies that all buy homes for cash.
One of the most well-known national companies goes by the apt brand name We Buy Houses. The Texas-based company operates in 31 states, including California, plus the District of Columbia. We Buy Houses purchases homes in as-is condition and promises to provide an offer on your home within 24 to 48 hours.
HomeVestors (also known as We Buy Ugly Houses) is another national company operating throughout California, with locations in San Diego, Riverside, San Bernardino, Los Angeles, Ventura, Santa Barbara, Bakersfield, Fresno, Monterey/Salinas, the San Francisco Bay Area and Sacramento/Stockton/Modesto. There’s also Sundae, operating in San Diego, Orange County, Sacramento, Oakland, Los Angeles and the Inland Empire, and Express Homebuyers, which serves Los Angeles, Sacramento, San Diego, San Francisco and San Jose.
California also has several local cash-homebuying companies, including:
- Sell Quick California: This local operation has been in business more than 21 years and operates in every county in the state. The company makes same-day offers after walking through your home and promises to spend time researching your home in order to come up with a fair offer price — as well as transparently showing you how they arrived at that number.
- California Family Homebuyers: This small, family-owned business focuses exclusively on the Sacramento real estate market. The company pays all selling costs and fees associated with the process and allows you to pick your own closing date.
- SoCal Home Buyers: Focusing on Southern California, this company buys houses as-is and can close on a home deal in as little as seven days. There are no fees or closing costs.
iBuyers are different from “we buy houses” companies. While they will also pay cash for your home and close the deal quickly, they are often digital-only businesses — meaning they do not typically maintain local offices in communities where they buy homes. In addition, iBuyers often will not buy homes in need of repairs, and often charge steep service fees similar to what you pay working with a real estate agent. Of the two best known iBuyers, Opendoor and Offerpad, only Opendoor is currently buying homes in select California markets.
How do ‘we buy houses’ companies work?
Most “we buy houses” companies follow a similar business model. This includes buying houses “as-is” — even houses in very poor condition that are in need of extensive repairs. You will not be required to invest in repairs. Some purchase condos and townhouses as well as single-family homes. Cash-homebuying companies also move very quickly. And finally, they will almost always offer you less than you would make selling the home traditionally with a Realtor.
The process typically follows these steps:
- Contact the company via phone or online
- A company representative will conduct an in-person assessment of your home to determine its value
- You receive a cash offer, typically within a few days or even a few hours. You can accept or reject the offer; there is no obligation to proceed, and there is typically no negotiating on price.
- If you accept the offer, you will sign a contract — read it very carefully! — and set your closing date.
While the simplicity of the “we buy houses” approach can be tempting, it’s not likely to be the most profitable option. Some alternatives to consider include:
- Selling with a real estate agent: If you are not in a time crunch, working with a Realtor can be far more profitable in the California housing market. The median sale price for a home in the state as of February 2023 was a steep $706,000, according to Redfin. When you sell a home to a cash home buyer, you almost certainly won’t get as much as you would on the open market.
- Sell on your own: You might also choose the for sale by owner (FSBO) approach. Selling a home on your own, however, means you do all of the work that a real estate agent traditionally does. That includes handling showings, negotiations, escrow and closing. But because you’re doing all of this work yourself, you won’t have to pay a real estate agent’s commission.
- Renting out your home: This option won’t result in the lump sum of cash you would earn selling your house outright, but renting your home can provide a steady stream of ongoing income. You’ll need to be prepared to become a landlord, though, which is not for everyone.
For most people, your home is your biggest financial investment. So when you’re ready to sell, it’s important to review your options carefully and do your research. Look into how much you stand to make on your home selling with a traditional real estate agent versus a “we buy houses” company or iBuyer. Armed with all of this information, you can make the best decision about how to sell your home.
Ask yourself how quickly you need to close, how fast you need the money in-hand, and whether you’re prepared to invest in needed repairs. Which is more important to you, speed and convenience or getting top dollar? If you decide to proceed with a “we buy houses” company, be sure to read the sales contract carefully and read customer reviews before signing on the dotted line. And if getting the highest price for your home matters above all else, work with an experienced local real estate agent.
Yes, for the most part these companies are legitimate. Many have Better Business Bureau accreditation and verified positive Google user reviews. However, scams are certainly out there, so it’s always important to read reviews and do your research before signing a contract.
Like all businesses, in California or anywhere, cash-homebuying companies are profit-driven operations. They typically offer far less for your home than you would make selling it on the open market with a professional real estate agent. Most companies offer about 70 percent of the home’s value.
Most upstanding “we buy houses” companies will not charge you any fees to sell your home. Many cover closing costs as well. (iBuyers, on the other hand, often charge service fees.) However, you will not make as much money from a homebuying company as you likely would with a traditional sale.