Why do people buy houses? They buy houses so that they can live in them, of course. But they also buy houses to make money by renting them out or selling them on the open market. Let’s look at some of the ways that people use the real estate today.
Some people buy houses just because they want to live in them. They think that buying a property at a low price can save themselves a lot of time and money in fixing it up later. Because most buy houses companies tend to specialize in distressed properties, they will sometimes even take your house right off the foreclosure list if they can get it to them at a low enough price. Then, We Buy Houses will fix up the house and sell it off for a nice profit. Depending on your circumstances, this would be a reasonably painless way to sell an otherwise unwanted house in bad condition quickly. This is what we call a “ripoff”.
Another reason that people sell houses is to use the profits from the sale to pay off their mortgage and other debts. Some sellers will offer to fix up the house for you, with the understanding that if you ever want to live in it, you can pay the repair credits right away. If you can get your house in good condition and you can afford the repairs, you should definitely take it up on the offer. A house that needs repairs but is still a good buy at a lower price is a good buy to make a profit off of.
You might see some houses for sale in your area that are priced very low, but the inside is really very clean, nice looking and well maintained. These are called “hyped” properties. They’ve been zoned as such and are therefore perfect for development, although they’ll probably never sell at the property value they’re listed at. If you can spot these during your research, you can often pick them up for much cheaper than you would expect, and you can turn a tidy profit on them.
Another way of getting hyped properties is to find houses that need extensive repairs. This is where you can find houses that are priced below their fair market value, but are in good condition. They might need new carpets, new wallpaper, new paint, new electrical wiring, roofing, flooring, windows, plumbing, new appliances, and everything else you can imagine. Because these houses are so appealing to buyers, the seller might try to get you to approve the repairs before the listing goes live, or give you a discount for doing so. The idea is to give you a great home so that you’ll be eager to make an offer when the real estate agent lists it.
Another example of homes that need major repairs but are priced so low is older houses. In the past, people didn’t mind buying houses that needed work, because they were usually homes in good neighborhoods that sold quickly and for top dollar. New technology and a more aggressive real estate market have changed the picture. Buyers these days want a house that’s in excellent condition and hasn’t been neglected. People who want to sell quickly can’t do that with older properties. An investor who wants to sell quickly has to think about whether the repairs are going to cost more than the asking price or whether he can find a buyer for the minimal expense involved.
Real estate professionals know how to buy houses in excellent shape and they also know how to sell houses in excellent condition at a nice profit, but if you aren’t part of that elite circle, you have to be clever. One thing that makes an old house desirable is that it will likely need little or no maintenance after you close on it. If you have cash buyers, you can do whatever you want to it to make it look great, but if you are dealing with a group that needs a house taken care of, you have to be clever.
For example, in many areas of the country, it is illegal for home owners to allow their houses to sit vacant for over two weeks. In those areas, you can use an elaborate system of “cash buyer repairs” to get your house sold faster, before the market slows down. In some areas, you have to wait a specific number of “days-out” before you can sell the house. You can use anything from a simple landscaping company to private contractors to complete the task. These are just a few of the “cash buyer repairs” you can use to close homes fast in order to increase your closing speed.