Can You Trust “We Buy Houses for Cash” Companies To Buy Your Home?
By Space Coast Daily // November 13, 2020
Over the past couple of years, the number of companies promising cash for homes has more than doubled in many parts of the US. “We Buy Houses for Cash” companies will often make tempting offers, of giving you cash within 48 hours of approving your home. However, can they be trusted? Can you sell a home for cash and if so, why isn’t everyone doing it?
Do These Companies Really Offer Cash for a Home?
Yes! 99% of the companies that distribute those handmade flyers promising cash in exchange for your home are in fact, giving people cash. While we can’t vouch for every company, most of them are legit at least in terms of giving you cash for a home.
However, whether it is done within 48 hours differs. Some companies, despite advertising instant cash, can take up to a week or more to give you the money according to Israel Ramirez ; found of Oklahoma City based We Buy Houses OKC.
Your decision to sell a home to one of these companies will be primarily based on how soon you want to get rid of the home. If the home is something you never expected to inherit, and you’d rather have cash without a hassle then selling to one of these companies is an excellent option worth considering.
The same goes if you don’t want to undertake extensive and often expensive repairs to make the home attractive enough to sell.
How to Not Get Scammed?
Now that you have decided to sell your home for that cash offer they have made, it is essential to be careful. We’ll go over how to proceed just so that you can walk away knowing that you got the best deal and avoided getting scammed in the process.
Get Proof of Funds
Now the company you are selling to should have the funds to cover the cash payment for the home. How do you know that? Well, you ask them for what’s called a proof of funds statement.
That statement as its called should have the following in it:
• It should be printed on the company’s official letterhead and issued by the institution where those funds are held. It can be from a brokerage firm or the bank.
• It should be a recently issued statement.
• It should clearly state the name of the account holder, and that should match one or more of the names of the people at the company.
• It should also have the balance of funds stated.
The proof of funds document can be anything like a recent bank statement, an online bank statement, an open line of credit, a money market account statement etc.
Get An Attorney’s Take on the Fine Print
All agreements, especially of this nature, have a bit of fine print which can be challenging for a regular person to interpret. Ideally, you’ll want to have a real estate attorney take a look at the agreement/documents.
The attorney will not just read and interpret the documents but will also work to protect you every step of the way. The attorney will review the contract to ensure that you are getting a good deal at least legally.
Contracts like these can often get complicated, which is another reason why you need a real estate attorney. Even if you have an understanding of the legalese, having an attorney on your side is still important. After all, some of the most seasoned people in the real estate industry employ an army of attorneys.
Plan for the Unexpected
What contingencies are attached to the cash buyer contract? If it says that they can back out of the deal if the company can’t find a buyer within 30 days, then are you OK with it? After all, more than 30 days means additional mortgage financing payments, utilities, taxes and insurance.
Chance are that the reason you are selling to a cash buyer is that you want to sell quickly, which makes 30 days too long of a time to wait for the money or even to find out that they will just back out of the deal. So, you might want to either tighten the timeline or move on to another buyer who does, in fact, pay cash that isn’t contingent on anything.
The Inspection Period
The other contingency you will want to keep in mind is the inspection period. When selling for cash, it is clear that this is an as-is sale. However, if there is an inspection contingency, it could mean that the buyer will renegotiate. Many times this is a tactic that businesses use to get a better deal than was originally presented.
It is here that having a real estate attorney can be helpful. An attorney will know a bad contingency plan when they see it, and they will also help you understand the contract more thoroughly. Understanding the contract often means that you can ask the buyer to change the points that aren’t favorable.
Can You Trust Them – What We Think?
Our experience working with cash buyers is that they can be trusted. Since it isn’t a regulated industry, it is up to you to conduct the required due diligence. Some companies are more open and transparent than others.
Ideally, you will want to deal with a company who is a member of the National Association of Property Buyers (NAPB) and is registered with The Property Ombudsman (TPOS).
Making sure of this will mean that they have to adhere to a code of practice. Plus, you have a degree of protection in the event of a dispute. You can always contact NAPB and let them know of a dispute with one of their member companies.
We can’t say that all cash for home companies can be trusted. However, they aren’t all scams either. Make sure to get offers from multiple companies before you decide to move ahead with one. Ideally, you’ll want to deal with a company that makes an offer that’s nearest to the property’s market value.