In this episode of the Love Living DC Show, Realtor Jennell Alexander tells you the truth behind those “We Buy Houses” offers.
If your home is anything like mine, every trip to the mailbox will include at least one solicitation from a “We Buy Houses” outfit. Sometimes they send glossy postcards while others are hand-written notes dressed up to look like a message from a friend. What they all have in common is an offer to buy our house “FAST!! ALL CASH!! NO HASSLE!!”
At best, this constant barrage of advertising can be a nuisance. However, as Real Estate professional, I’ve seen cases where the harm they can cause is real. I met a family in the city a few months ago who sold a home they had inherited to one of these companies for about $200,000 less than it was worth on the open market! That is a significant amount of money that the family could have used to start a business, pay down debt or fund their children’s education.
One of the most common mistakes that homeowners can make is assuming that these “We Buy Houses” offers represent the true value of your home. In this post, we’ll take a deep dive into how these wholesale transactions may be stripping longtime homeowners of tens of thousands of dollars in wealth.
The Truth About “We Buy Houses” Offers
Here’s the truth: If you own a house in the Washington, DC area, whether you bought it yesterday or 30 years ago, you are sitting on an asset! Home prices in the city are at record highs and the number of homes available for sale is near record lows. Real estate investors are searching for houses they can buy for far less than they are worth. They put a little work into them and then turn around and sell them at full price. And some don’t do any work; they simply “sell the deal” to another investor the very same day!
It’s a lucrative business, but it only works if they can find houses to buy at a discount. Generally, these wholesalers want to buy your home at a discount between 30% and 40%. For example, if you house is worth $400,000 on the open market, these firms will offer to buy it from you for somewhere between $240,000 and $280,000. They say, “No Commission”, but they take a cut that is five times larger than what a real estate commission would be!
Even worse, some unscrupulous wholesalers have been known to report houses they’re interested in purchasing to authorities for code violations. A senior citizen who can’t afford to make city-required repairs may decide to sell under financial pressure.
How can you protect yourself?
This is one situation where knowledge truly is power. Your first step should be to get in touch with your Realtor®! Even if you’re not currently considering selling your home, it is in your best interest to meet with a real estate agent so that you can understand its true value. Those “We Buy Houses” offers can be very convincing. As your agent, I will be able to evaluate the current status of your home.
Secondly, understand your family’s situation. In some cases, a cash offer might be the best option you. If your house has a leaky roof, a cracked foundation and broken plumbing, the necessary repairs might simply be too expensive for you at this time. In a situation like that, accepting a cash offer may make sense. But let’s make that the last resort, not the first one.
Just Don’t Want the Headache
You might be saying to yourself, “But I don’t want to put this house on the market. I don’t want to fix it up. I just want this headache over with!” If you deal with a real estate wholesaler on your own, you could make a devastating mistake, like giving your home away for just a fraction of its true value. Nothing in this business makes me sadder than when I hear about families losing the generational equity that could have gone to making their lives better in so many ways.
As an experience Realtor from the #1 Real Estate brand in America, I can help you make the most out of this situation. I can:
- Analyze the true current market value of your home
- Provide alternatives to selling it wholesale
- And, if you decide to sell on the open market, provide the guidance that you need to sell your home for the highest value, in the shortest amount of time
Act with Assurance
At this point, you may be convinced that you may need some guidance around how to deal with these “We Buy Houses” offers. But you may also be thinking that you have no idea where to start. If you’re thinking about a situation like this, I can help you through the process. Just send me a message or text me at 202-717-2276. No pressure, no sales tactics, just the help and guidance that you need!
Finally, if you’re a resident of the Washington, DC area, I want to let you know that I have a free Facebook Group for members of our community! It’s called, Love Living DC. It’s a great place to join a strong network of Washingtonians who get weekly information about the best events and activities happening in and around town. If you’re interested in joining, check out this link: Love Living DC Private Facebook Group.
If you have any questions about these “We Buy Houses” offers, leave a comment below or contact me directly by text or email. Thank you so much for reading this today. I’ll see you in the next article.
Previous Posts in this Series
- What Closing Costs You Can Expect to Pay When Buying a DC Home
- Is Washington, DC In A Buyer’s Market Or a Seller’s Market?
- 3 Fool-Proof Strategies To Improve The Overall Value Of Your DC Home