If you live in an area that is experiencing a rise in home values, then you’ve probably seen these signs that say “WE BUY HOUSES.” I get a lot of people asking me, if these ‘we buy houses’ signs are legit so I thought I’d answer that here.
While these signs are usually not a scam; it does help to understand what they are, why they exist, if you should call one, and which one’s you can trust.
What Are “WE BUY HOUSES”, signs?
These signs are small, corrugated plastic signs that are either printed or hand written, stating “WE BUY HOUSES” followed by a phone number. There are yellow ones, white ones, blues ones… you get the point. You’ll see them either stuck into some grass, or tied to a telephone pole.
Who Puts Them Out?
Typically, they are put out by individual real estate investors, or larger real estate investment groups in order to find houses to buy for cash, so they can renovate, rent, occupy ect.
Why Are They Used?
The reason these “WE BUY HOUSES” signs are used, is so that the investor can reach their ideal customer in a very specific location (maybe close to where they live), without spending big bucks on advertising via traditional marketing like radio or PPC. It is common for young or new investors to use this marketing tactic. Other investors like using them for another reason as well. It provides a confidential way to sell a home fast, for people who don’t want to walk into a fancy-schmancy brokerage and explain to a real estate agent why they have to sell, or why their house isn’t in great shape.
How Do They Work?
Larger investment groups will use a call service to answer the calls, or it can be the investor themselves who answers via a google voice number. They’ll typically ask you a few questions about why you are selling, and the condition of the house. Then, they’ll get the address from you so they can see if they are interested in your location and if they want to come see it to give you a cash offer on your house. These offers are going to be lower than what you might get on the market, or what Zillow is saying your house is worth (never use Zestimate to value your home), because they will take into consideration the necessary repairs and associated costs with buying the house. If you accept the offer, a contract will be signed and a closing date chosen. The process can be much simpler than listing a house, because the investor makes no repair requests, and isn’t waiting on a loan to be approved.
Should I Sell My House To An Investor?
Investors are looking for specific types of houses to buy. Below is a list of some of the situations and home types they are looking for. If your situation or house sounds like any of these, then selling to an investor is something to consider.
- Homeowners That Want To Sell Quickly: A home owner may want to sell a house fast for many reasons. For example:
- Death In The Family
- Cleaning up personal finances
- Houses That Need Repair
- Houses That Are Not Listed With An Agent: This is to avoid racking up fees from agents.
- Houses That Need Updating
How Do I Know I’m Not Getting Screwed?
- Make sure to meet with the investor or the investment company representative in person at the house. Don’t sign contracts with someone you’ve only spoken to on the phone.
- When they give you an offer, ask them to break down, how they came to that number. It puts them on the spot and gives you an inside perspective of how they are valuing your home and if they really did their research.
- Verify the title company they will be closing with. Call the title company they give you, and ask if they do business there. This ensures you aren’t working with a newbie.
- Make sure they have some kind of online presence. A Facebook account, or a website that provides some sort of proof that they do indeed buy houses regularly.
- Ask for proof of funds if you are concerned they may not be able to buy. An experienced investor should have this available in 24 hours. Honestly, if you get a feeling like that… don’t sell to them.
- Don’t just accept the highest offer. This can be a big mistake as less experienced, younger investors or wholesalers will make a big offer to get the deal done, but may come back and try to renegotiate when they realized they offered too much. Go with the person you like and trust. Even if it isn’t the highest offer.
To recap, the signs can be legit, but selling your house to an investor for cashisn’t for everyone. If you have a house that is fully updated, or is a new build, consider listing it on the market and seeing what you can get. You can often get a higher bidder going that route. For those who want to sell their house fast for any reason, or want to sell a house as is, then selling to an investor is a really great option to consider.