Home buying companies come in handy when you want to sell your house quickly. Since such companies don’t care about the current cosmetic condition of the property and how its appearance is, you can avoid having to polish up the house and sell it as it is. Yet another advantage of such entities is the ready cash they offer and the security that comes with it. You no longer have to worry about your buyer’s pre-approval or mortgage and go ahead and move to your new place.
However, with home buying companies like HomeFront becoming prominent in the real estate industry, it is necessary to understand the different types of such entities and choose each of them.
- House flippers
House flippers are investors who buy a house, make necessary modifications to the property before selling it to another buyer. The process of buying, remodelling, and selling is usually closed as quickly as possible but can vary depending on the market. This type of buyer usually looks for things they can repair in the house to get them at least 10% of the ROI later. Homeowners can expect a discounted selling price with house flippers because such buyers aim to make a profit.
Similar to house flippers, buy-and-hold companies are looking for a good ROI when they buy a house. While they may not require you to present an attractive curb appeal right away, such companies would still look for certain features that satisfy the kind of market they serve. This type of buyer usually buys a property, remodels it, and then rents it out. Such buyers are everywhere in the country, ranging from big companies with in-house teams to small family-owned businesses that do their property management.
iBuyers are house buying companies that rely on current real estate trends and data to offer properties without even a site inspection. This usually requires homeowners to reach out to the company before getting an offer. Once both parties accept the offer, the iBuyer will send a representative to check the house’s condition. In some cases, such companies may ask for repairs before closing or credit for the same. It is to be noted that such companies look for homes with the least amount of repairs.
- Trade-in companies
Trade-in companies are unique because they choose to buy your house and sometimes offer a place to rent until they sell your old house. In most cases, they set a rate for your old house, work with your realtor, and make an offer. Once the offer is accepted, you can move on to your new house, and if your old place sold for more than what was paid to you, most companies give you extra cash after dedicating the service fees.
- Local investors
Local investors are essentially home flippers and buy-and-hold companies that focus specifically on certain cities. Their reach is limited to a specific area or region and is not an option for people outside this area. This is a great option if you are looking for a company familiar with the local rates and real estate market. Like other options in this list, local investors buy your house to sell or rent it to someone and have certain criteria for the houses they buy.
Home buying companies are nothing new. Therefore, you will find different types, ranging from flippers, who renovate a property they buy and sell it to another buyer later, to buy-and-hold companies, which buy a property to rent it out later. Knowing the difference will ensure you are picking the right buyer for your property.