Have you ever been in your car at an intersection and noticed a neon sign hanging from a telephone pole that says “We Buy Houses for Cash in Milwaukee” accompanied by a phone number? Even if you didn’t notice it, you’ve almost certainly passed dozens of them in your travels. Your first thought might be, “This can’t be legit, right?” Your second thought might be “Can I really sell my house for cash to someone?” If you’ve had trouble selling your house or have a house that’s dealing with damage or financial issues, that sounds like a solution that could make a lot of sense for you. But surely there’s got to be a catch, right?
Let’s dive into whether or not you can trust “We Buy Houses For Cash” Signs and the companies behind them.
Can You Trust “We Buy Houses” Signs In Milwaukee?
Who Are “We Buy Houses” Companies?
There is a wide range of companies that fall under this banner, and some are more legitimate than others. But the basic gist is that these companies or people are otherwise known as real estate investors, cash buyers, or “as-is” buyers. They will buy your house at slightly less than market value for cash or another agreed-upon financial arrangement without requiring you to make any kind of repairs or updates beforehand. They then turn around and handle all of the damage or financial issues involved with the house themselves and either sell it for a profit or act as landlords for the property.
What Kind of Homeowners Do They Work With?
The quick answer is that they work will all kinds of homeowners. But there are specific situations that tend to happen more than others. Most often, the person selling the house isn’t able to sell their house on the open market for some reason. It could be because of a financial issue, such as a lien or foreclosure. It could be because there is significant damage that scares off buyers, such as flooding or mold. Or it could be because the property is simply distressed and would never find a buyer on the open market.
There are also specific and unique situations that can come up and cause a seller to look for a cash buyer instead of going to the market. If a buyer inherited a property they don’t want, they might not want to deal with the hassle of getting an agent and selling it. If the seller has squatters living inside the property and doesn’t want to have to deal with the legal and financial ramifications, they might want to offload it to someone else. The house might also have been lived in by a hoarder or tenant who took very poor care of it and it doesn’t feel worth investing in the clean-up. There’s also code violations, termite infestations, divorce, lawsuits, and many other reasons why sellers would want to look to real estate investors for a cash offer.
How Can These Buyers Pay in Cash?
While home buying companies and investors want to help you get out of a jam or situation, they are also their own business. That business is often about flipping homes or turning distressed properties into ones that can be lived in by others. If they’re established and accredited, they’ve likely been through this process enough to have cash reserves that they can put towards purchasing properties such as yours and then investing in them in order to sell later for a profit. A cash buyer starting out might also be working with investors who provide them with enough capital to purchase homes like yours while they go through the flipping process in order to recoup costs and start turning a profit. And it’s also possible they have received a Hard Money Loan, which is a loan that relies on an asset or property as collateral. These kinds of loans are often used in lieu of credit scores or as ways to get a loan without going through a bank. However, a legitimate investor will always have the money available before speaking with you about buying your house for cash.
Of course, there are also going to be We Buy Houses companies and investors who don’t actually have any of these financial means and are, in fact, scammers looking for a quick buck. So it’s important that you understand the difference and how to spot them.
How to Spot a We Buy Houses Scam
Plenty of educated people get tricked by We Buy Houses scammers so all the more reason to make sure you know how to spot the warning signs if you do dial the number on that ad (or deal with any cash buyer).
First, look at how the company positions themselves. Did they include a company name in the ad or billboard? Or did they just include a phone number? That’s not really the kind of thing a legitimate business does (or should be doing). It’s deceptive by omission. A reputable business has nothing to hide, so why aren’t they telling you what their name is and who they are? And don’t assume you can trace the number because modern technology makes it so people can route phone numbers and make it hard to know who you’re calling.
If they do have a company name, then you should be able to find out more about them with a little bit of searching. Do they have a website? Do you see other websites linking to them? Do they come up in review sites such as Yelp, Foursquare, Glassdoor, and Manta? Are they on Facebook, LinkedIn, or Twitter? Even if they don’t show up everywhere, they should be visible enough that you’re able to find out more details about who they are, what they’ve done, and what other clients thought about them.
If you really want to be sure, check the Better Business Bureau to see if the company is accredited through them and if they have any reviews or past issues. When in doubt, if a company isn’t a Better Business Bureau accredited business, you should probably avoid them, at least until you receive many assurances in other ways.
Should I Consider a We Buy Houses Buyer?
The short answer is, it depends. It depends largely on your situation, the condition of your house, and how much time and money you’re interested in putting into the home selling process. If you feel as though you’re going to have a hard time selling on the open market or don’t have a lot of time to get the house sold, then you should consider reaching out to a reputable cash buyer to find out what their offer would be.
A reputable company will make you a no-strings-attached offer within days and will walk you through the entire process without trying to force you to sign anything you don’t want to. If anyone ever tries to get you to sign a contract you don’t understand, you probably shouldn’t be working with them. So look for the We Buy Houses buyer who is interested in finding out about your situation and offers an honest deal and treats you fairly. Ultimately, no one gets to tell you what to do with your house, so make sure you work with a buyer who understands your needs and honors them.