Have you noticed those signs around town saying that they’ll buy your house fast, for cash? Have you been receiving letters in the mail or even gotten emails offering to buy your home?

If you’ve ever sold a house before, you know the process can be pretty stressful. In fact, a 2019 survey found that selling their house (77%) was more stressful than buying a house (72%) and only slightly less stressful than breaking up with a significant other (78%).

If you’re dreading the home selling process, you might be tempted by one of these “fast cash for houses” offers. After all, wouldn’t it be nice to skip all of the preparatory repairs, the inconvenient showings, and the sleepless nights waiting for the buyer’s mortgage to go through?

Before you call the number on that flier, stick with us to take a look at the pros and cons of selling your home to one of these “We Buy Houses” companies. While it might be the right choice in a few situations, it just means you’re leaving money on the table in many others.

The Pros of Selling to a “We Buy Houses” Company

Selling your house to a company that purchases them in cash can mean that the process is faster, more convenient, and less stressful. Make sure you read to the end of the article, though, as the convenience you receive using this type of service comes at a major cost.

You’ll Get a Cash Offer

When you sell your home to a “Fast Cash for Houses” company, you’ll receive a cash offer for your house. This can be pretty appealing as a homeowner– there’s a reason why “cash is king” is a common expression in the real estate industry. Receiving a cash offer can help boost confidence that the deal will go through, and the faster and simpler closing process can ensure that your house is back on the market quickly if something does go awry.

The Process Is Fast

Even when a homebuyer is preapproved for a mortgage, they still have to receive the actual approval from the lender and go through the underwriting process. No matter how much of a “sure thing” it is for the buyer, there really isn’t much one can do to make this stage go more quickly.

When you sell your home on the traditional market to a buyer that is going to finance the purchase with a mortgage, it will usually take between 45 and 60 days. This period of time can be pretty stressful because it’s not a done deal until the money and the keys have exchanged hands.

With a cash offer, the closing can occur in as little as two weeks. Some “We Buy Houses” companies might even advertise a shorter period of time between making an offer and closing.

If time is of the essence, the prospect of having the entire process over within just a couple of weeks can be pretty appealing.

The Process Is Convenient

One of the biggest selling points about selling to one of these companies is that it’s really convenient. You don’t have to deep clean your house or clear out every time there’s a showing. You don’t have to fear the outcome that someone will finally make an offer on your home only to back out right before the closing. You don’t have to worry about inspections or the appraisal coming in low.

Of course, this convenience comes at a price. As we’ll discuss later in the article, these companies will only offer 50%-70% of the actual market value of your home. In some instances, such as a home that needs a lot of repairs or a circumstance when you really need to sell quickly, the convenience might be worth the cost. In most cases, though, it’s usually worth jumping through the hoops of the open market to earn a much more substantial profit.

Sell In As-Is Condition

These companies will buy your house in “as is” condition, meaning that you don’t have to go through the extensive list of maintenance, repairs, touch-ups, and preparations that are all but required when listing your home on the market.

When you’re going to be listing your house through the traditional method, you’ll want to fix that leaky faucet, replace your old carpet, and repaint the walls. You might even invest in your curb appeal by replacing your house numbers, sprucing up your landscaping, and putting some potted plants on your porch.

If you simply don’t have the time for that type of thing and don’t want to invest the money and energy into it, selling the home as-is to a cash buyer can mean that you don’t have to lift a finger or write a check to a handyman.

For example, let’s say that you inherited a house in Atlanta that is in serious need of some TLC. In order to get it ready for the market, you’d have to invest tens of thousands of dollars just to get it ready for photos. Meanwhile, you’re covering all the costs of ownership and maintenance while waiting for someone to make a reasonable offer.

This is a time-consuming, expensive, and nerve-wracking proposition. In this type of situation, you might find that selling to a cash buyer at a reduced price is, all in all, the best possible option.

Avoid the Traditional Costs of Selling

When you hire a real estate agent to help you sell your house, they’ll collect a commission based on a percentage of the sale price. At the same time, the seller is usually responsible for paying the commission to the buyer’s agent as well. In Georgia, the average real estate agent is 5.8%, which can add up to a hefty fee when you’re talking about hundreds of thousands of dollars.

Closing costs are also associated with selling a house to a traditional buyer, which usually amounts to 1-3% of the sale price.

On top of that, there are “carrying costs” associated with selling a house– you have to keep paying the mortgage, property taxes, insurance, utilities, and so on– until the closing.

With a company that will give you a cash offer for your house, you don’t have to worry about realtor fees or closing costs. While there will still be some carrying costs, they’ll be significantly reduced because the time to close can be so much faster.

Remember, though, you’re still almost guaranteed to profit more money from the sale of a house if you use a realtor and sell on the open market. Even though there are costs associated with selling a house this way, the reduced price offered by a “cash for houses” company will almost mean that the most money is earned using a real estate agent.

This doesn’t mean you shouldn’t sell to one of these companies, but it does mean you’ll want to think about your primary motivations and needs in selling. If you need to sell your house quickly, it needs a lot of repair work, or both; this could be the simplest option. On the other hand, if you have some time to spare and you’re interested in extracting the most value from your home, selling on the open market with a realtor is definitely the better way to go.

Wondering how much your home is worth? You can use our free home valuation tool to find out.

Avoid Showings and Open Houses

If you’ve ever sold a house before, you know that it can be pretty disruptive to the normal flow of your house. You find yourself spending your free time keeping your home in immaculate condition in case your realtor calls with a last-minute showing and you’re frustrated by the need to vacate your home while another couple wanders through.

One of the benefits of selling your home to a “We Buy Houses” company is that you don’t have to deal with any of that. They will likely come through for an in-person walk-through, but since they’re flippers, they can “see through” clutter and old paint more than a traditional homebuyer.

The Cons of Selling to a “We Buy Houses” Company

While the list of pros to selling to a “Fast Cash for Houses” company might sound pretty compelling, stick with us a minute longer.

The truth is, the disadvantages outweigh the benefits in almost all situations when it comes to selling your house this way. Though it can take a little longer, require a bit more upfront investment, and means your house will need to be available for showings, it’s generally well worth it when you realize how much more you’ll be able to get for your house on the open market.

Unless you’re in a hurry to sell your house or it needs significant repairs (or both,) there are some pretty compelling reasons to take the more traditional route to home selling.

Substantially Lower Sale Price

You will never make as much money selling to one of these companies as you will if you use a real estate agent. “We Buy Houses” companies are flippers, meaning that they will usually only offer somewhere between 50% and 70% of the actual market value of your home. They are incentivized to purchase your house as cheaply as possible so they can profit as much as possible when they go to relist it (on the open market, mind you.)

House flippers often talk about the “70% rule” when it comes to buying a property. This rule states that investors shouldn’t pay more than 70% of the after-repair value of a home minus the necessary repair and renovation costs. Essentially, this means that they will try to calculate how much it will cost to fix the place up, how much they can sell it for once they’ve done the repairs, and offer you no more than 70% of what they plan to sell it for after subtracting the renovation costs.

When you work with a real estate agent, though, they will help you get the highest possible price for your home. They’ll advise you regarding repairs that will be worth doing, inexpensive curb appeal improvements you can make, and whether or not you should hire a staging company.

Beyond that, they’ll market your home so that you can receive as many potential buyers as possible. This opens up the potential for multiple offers above the listing price and could maybe even spark a bidding war.

Limited Market Exposure

There are only a small handful of “cash-for-homes” companies, but there are potentially hundreds or thousands of interested buyers who would bid against each other to purchase your home for a higher price.

Competition drives up prices, and there isn’t much competition when you sell to an investor for cash.

If you’re primarily interested in making as much money as possible from the sale of your house, you’ll want to have it listed and marketed with the help of an experienced real estate professional.

It’s worth noting, too, that homes can start receiving offers quickly in the desirable areas of competitive markets. If you’re concerned that the inconvenience of selling your home will mean endless months of showings, that isn’t necessarily the case. Speaking with an experienced local realtor can help you get a sense of how quickly comparable homes are selling and what you can expect in terms of disruption to your daily life from the selling process.

Potential Exposure to Scams

Another important thing to realize about these companies is that they can sometimes be predatory against struggling people or even be outright scams.

While some legitimate companies buy houses for cash, some might try to collect application fees or push a verbal rather than written agreement. Others will try to convince homeowners to sign over the title to their home, expecting the company to sell after the title transfer occurs.

Even if a company isn’t a total scam– i.e., they will actually buy houses for cash– that doesn’t mean that all of these businesses have the seller’s best interest in mind. After all, they’re trying to turn a profit by flipping your home, and the cheaper they can buy it, the more money they stand to make.

There are definitely legitimate investors that will buy your house for cash that isn’t out to scam you or otherwise pull the wool over your eyes. For homes that are in need of significant repair or people that need to sell quickly, this can be the best option. However, it’s always important to research the company, take a look at reviews, and ensure that they are reputable and legitimate before making any moves.

Are You Ready to Sell Your Atlanta Home?

If you’re not in a rush to sell your house and you want to extract as much value from it as possible, it’s worth the time and extra hassle to sell it on the open market. Luckily, when you work with a world-class team of real estate experts like the Justin Landis Group, the process of selling your home can be straightforward and seamless.

If time is of the essence and you’re looking for the easiest way to sell, we can help you out there too. If you’re looking for a cash offer from a reputable company that will make selling your house fast, easy, and completely stress-free, you can receive an instant cash offer from us, too.

When it comes to selling your home in Atlanta, you’ve got options with the Justin Landis Group. If you have any questions at all, don’t hesitate to reach out and get in touch!