We answer the questions “Is We buy houses a Scam?”

How we come up with our Cash buy offers.

What is a ‘We Buy Houses’ Company?

“We Buy Houses” companies are backed by investors who purchase homes in order to renovate and resell them for a profit. These companies specialize in buying properties in their current condition, without requiring any repairs or preparations, and offer to pay in cash.

What is a ‘We Buy Houses’ Company?

“We Buy Houses” companies are backed by investors who purchase homes in order to renovate and resell them for a profit. These companies specialize in buying properties in their current condition, without requiring any repairs or preparations, and offer to pay in cash.

After Repair Value (ARV) vs. Value/ Worth: Many people rely on prices they see on websites like Zillow or Refin when determining the expected selling price of their house. However, these numbers are merely estimates without any defined criteria. What does that mean? When conducting research on prices in a specific area for buying or selling purposes, it’s crucial to have a well-defined scope and similarity to the subject property.

To narrow down the comparable properties, we typically consider 3-5 properties with similar square footage, number of bedrooms and bathrooms, year built, within a 0.5-mile radius, and from the last 6 months. This helps us assess the similarity in structure, lot size, garage, yard size, and the potential to add value. We also take into account whether the property has been updated with new kitchens, bathrooms, paint, floors, HVAC, and roof.

Ultimately, the focus is on the After Repair Value (ARV). This refers to the value of the property after it has been remodeled, considering all the factors mentioned above. It’s important to note that there are different levels of remodel, depending on the intended use, such as rental properties. Entry-level remodels typically range from under $300,000 to $500,000, mid-level remodels range from $500,000 to $900,000, and high-level remodels exceed $900,000. These ranges provide a general idea but can vary.

For example, if your house has “new floors and a granite kitchen counter” that were installed eight years ago, it may not meet the ARV quality standards. Sometimes, people have an unrealistic sense of their house’s value, comparing it to houses that are significantly larger, have extra bedrooms and bathrooms, and have been extensively updated. Bringing your house up to a similar remodel level could cost around $140,000.

How do ‘We Buy Houses’ Companies Work?

The process followed by “We Buy Houses” companies may vary, but they generally adhere to the same basic business model:

1. Home sellers directly contact a cash buyer company.
2. The company assesses the property, taking into consideration factors such as necessary repairs and potential resale value.
3. Based on the time and money required to invest in the property, the company presents an as-is cash offer.
4. If the homeowner accepts the offer, the deal can be closed quickly, without the need for negotiations, financing approval, property inspections, or appraisals.
5. The cash buyer proceeds to repair and renovate the purchased property, aiming to resell it at a profit.

1. Are ‘We Buy Houses’ Companies Scams? Most “We Buy Houses” companies are legitimate businesses focused on making a profit by buying and selling distressed homes. While scams do exist, the majority of these companies operate within the bounds of legality and maintain their reputation to close deals.
2. How Can I Sell My House Fast in Sacramento? Selling to a “We Buy Houses” company can allow homeowners to close the sale within one week with certain companies. However, it is important to note that selling to these companies typically results in receiving only around 50-70% of the home’s value. In many cases, selling with the assistance of a real estate agent on the open market could yield a higher return.

Additional Resources for Home Sellers in Sacramento

For homeowners in Sacramento who need to sell their houses, there are additional resources available to provide guidance and assistance

Q:  Will you be listing my house on the MLS or actually buying it?
A:  Great question. We’re not agents, and we don’t list houses. We are professional home buyers and we purchase properties quickly and for cash. From there we may repair the house and resell it to another homeowner or keep it as a rental ourselves.

Q:  Do you pay fair prices for properties?
A:  Many of the houses we purchase are below market value. We do this so we can resell it at a profit to another homeowner. We are looking to get a fair discount on a property. In our experience, many sellers aren’t necessarily expecting a large “windfall” on the property. Instead, they appreciate that we can offer cash, we close very quickly (no waiting for financing), and no time, effort, or expense is required on your part to fix up the property or pay agent fees. If that’s what you’re looking for and you see the value in getting your house sold fast, let’s see if we can come to a win-win price for both parties. Our no-obligation pricing commitment means that you don’t have to move forward with the offer we give… but it’s good to know what we’re offering!

Fair Market Value ARV vs What it’s worth –

After Repair Value (ARV) vs. What it’s Worth: Many people rely on prices they see on websites like Zillow or Refin when determining the expected selling price of their house. However, these numbers are merely estimates without any defined criteria. What does that mean? When conducting research on prices in a specific area for buying or selling purposes, it’s crucial to have a well-defined scope and similarity to the subject property.

To narrow down the comparable properties, we typically consider 3-5 properties with similar square footage, number of bedrooms and bathrooms, year built, within a 0.5-mile radius, and from the last 6 months. This helps us assess the similarity in structure, lot size, garage, yard size, and the potential to add value. We also take into account whether the property has been updated with new kitchens, bathrooms, paint, floors, HVAC, and roof.

Ultimately, the focus is on the After Repair Value (ARV). This refers to the value of the property after it has been remodeled, considering all the factors mentioned above. It’s important to note that there are different levels of remodel, depending on the intended use, such as rental properties. Entry-level remodels typically range from under $300,000 to $500,000, mid-level remodels range from $500,000 to $900,000, and high-level remodels exceed $900,000. These ranges provide a general idea but can vary.

For example, if your house has “new floors and a granite kitchen counter” that were installed eight years ago, it may not meet the ARV quality standards. Sometimes, people have an unrealistic sense of their house’s value, comparing it to houses that are significantly larger, have extra bedrooms and bathrooms, and have been extensively updated. Bringing your house up to a similar remodel level could cost around $140,000. The difference in square footage and bed abd bathrooms account for over $200,000.

Q:  How do you determine the price to offer on my house?
A:  Great question, and we’re an open book. Our process is very straightforward. We look at the location of the property, what repairs are needed, the current condition of the property, and the value of comparable houses sold in the area recently. Taking the many pieces of information into consideration, we come up with a fair price that works for us and works for you, too. We at ake into consideration the ARV and the repairs but a investment buyer we a seeking a ROI , meaning profit. A reasonable expectation of profit for the builders flippers of the properties is 10% minimum ARV,. meaning once its fixed up can we walk with a 10% profit after expenses (a whole other article). How that effects you the seller is for example your house is $400,000 ARv but needs $65 in repairs , w e want to make $40k , but we have expenses of buying selling insuring , lending, etc we will estimate $15000. $120,000 total – So we offer you $280,000 is a general example and all deals are unique.

Q:  Are there any fees or commissions to work with you?
A: This is what makes us stand out from the traditional method of selling your house: there are NO fees or commissions when you sell your house directly to us. We’ll make you an offer and, if it’s a fit, then we’ll buy your house with no hassles and no fees. We’ll often pay for the closing costs, too! We make our money after we pay for repairs on the house and sell it for a profit. We’re taking the risks here on whether we can sell it for a profit or not. Once we buy the house from you, the responsibility is ours and you walk away without the burden of the property and its payments, as well as cash in your hand.

Q:  How are you different from a real estate agent?
A: Real estate agents list properties and hope that someone will buy them. The agent shows the properties to prospective buyers if there are any (the average time to sell a property in many markets right now is 6-12 months) and then takes a percentage of the sale price if they find a buyer. Oftentimes, the agent’s commission is 3 to 6% of the sale price of your house. If it’s a $100,000 house, you’ll pay between $3,000 to $6,000 in commissions to an agent.

Agents provide a great service for those that can wait 6 to 12 months to sell and who don’t mind giving up some of that sale price to pay for the commissions. But that’s where we’re different. We’re not agents, we’re home buyers. Our company buys the house directly from you. Since we pay with all cash and purchase the house from you, we can make a decision to buy your house within a couple of days (sometimes even the same day). Again, we make our living by taking the risk to buy the house with our own cash, repair the house, and market it ourselves to find a buyer.

Q:  Is there any obligation when I submit my information?
A: There is absolutely zero obligation for you. Once you tell us a bit about your property, we’ll take a look at things, maybe set up a call with you to find out a bit more, and make you an all-cash offer that’s fair for you and fair for us. From there, it’s 100% your decision on whether or not you’d like to sell your house to us. We’ll let you decide what’s right for you.

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Learn The Pros and Cons Of Selling Your House To A Local Professional Home Buyer – Your FREE Guide: 

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Get your FREE Guide and then give us a call at 916 906-.0466. We would love to discuss what your home is worth and what we can offer to buy it with our Cash Offer Program.