How do ‘we buy houses’ websites work? Do they even work for investor home buyers and sellers?
A variety of variations of we buy houses sites have been popping up on the web, on TV, on billboards and in the news. How do they work? When is this a smart way to sell your home?
Real estate investors may also be wondering if these websites can really work for them to find more properties to buy to renovate or rent out. If so, what makes the difference between those that flop or come out on top?
The Rise of We Buy Houses Websites
Variations of we buy houses have been around for years. Although on a very low key level. They seem to have exploded in popularity in the last few years as the real estate market has changed, the internet and technology has improved the process of conducting real estate transactions online, and thousands more investors have become alert to this opportunity and have tried to participate.
For a long time we’ve had the We Buy Ugly Houses brand of franchises. More recently we’ve seen institutional capital trying to cash in on this through sites like OfferPad and OpenDoor. Then there are giants like Zillow who have begun dipping their toes in. That’s in addition to a barrage of local amateur attempts, as well as the tech driven and highly efficient Kribbz platform.
How We Buy Houses Sites Work
Each we buy houses website works in its own unique way. Most are still small, and are focused on a very specific part of the market and target property or seller.
These differences often include:
- Location they will buy properties in
- Property condition (full rehab or cosmetic repairs)
- Price range
- Seller’s situation
- Type of property (home, condo, townhouse, etc.)
The basic concept of how they work essentially stays the same:
- Enter your information on the website
- Speak to a representative for clarification on your property condition and status
- Receive an offer
- Sign the contract
- Close within a week or two
Two of the bigger differences are cost and fee structures and inspections.
Some platforms like Zillow just use this to get leads for Realtors. Meaning sellers and buyers are still paying real estate agent commissions. Others like OfferPad charge a variety of miscellaneous fees which end up being the equivalent of paying real estate commissions for sellers. Others charge no fees and will cover any of the sellers’ expenses in their offer. Including Realtor commissions and attorney’s fees as well as closing costs and lien payoffs.
Many make the process sound easy online. Then the buyers will want to come out and personally inspect the property before making an offer. Others, like Kribbz will have a professional inspection done for the sellers’ benefit. The majority of these cash buyers are still purchasing the property as-is.
Do We Buy Houses Sites Work?
Absolutely. Not every website will be a great success for each individual seller and their property and situation. Not every website attempt will be a great win for investor buyers looking for access to more properties.
Still the numbers seem to show that they can be successful for the operators, buyers, and sellers. Some buy just a few houses a year. Others buy hundreds. Some totally flop.
Why Sell Your Home To A Cash Buyer?
Realtors are not always a big fan of these websites. Some are fearful and find it hard to compete against them. Though, if they are smart, they can work together to the benefit of the client and create great win-win solutions for everyone.
The original premise of these sites was targeted to motivated sellers of distressed homes. Often these owners have no other choice but to find a fast cash buyers. Realtors may not list these homes. They may not qualify for a buyer to finance them. They may require too much more to be invested in improvements to be marketed well on the open market. Or there may be a foreclosure auction date, or other deadline looming that must be beaten.
This has evolved over time though. Now there can be websites like this that appeal to virtually every seller. That includes those with burned out and storm damaged homes and those in divorce, to estate sales and even brand new construction.
The top reasons to sell your home this way include:
- Speed and being able to close in days instead of months
- Certainty in a qualified buyer
- Ease of selling, with no requirements to make repairs
- A buyer who will handle code violations, liens and past due property taxes
- Less hassle
- Avoiding hefty Realtor fees
- Lowering risk of damage or loss of property before a sale
- Netting more money by selling faster
We Buy Houses Sites for Investor-Buyers
These sites have proven to be very successful for some investor-buyers. Others have struggled to get results with them. It all depends on how you do it.
Factors involved in success with the DIY approach include:
- Website design
- How website leads are generated
- Conversion rates
- Follow up
- The quality of offers made
- Customer service
- The selling process
We buy houses sites do work. They can be very beneficial to all types of home sellers. They can also be very effective for buyers and investors. It’s all about how you do it, and finding the right match.