Are the "We buy houses cash as is LLCs" for real?

Question

Thinking of selling our property in IL as it is. Some work was done like new floors. We just want it out our hands and considering the "I will buy your house for cash & as is LLCs" Are these people/companies actually honest and would they give us a fair market value? Would appreciate anyone's experience. Happy to chat to any investors in this area too!

Ken M. · Answer

Your Question "would they give us a fair market value?"If you want "fair market value", which I think you mean "Best Price", you have to put it on the MLS, along with waiting for a seller and accepting whatever offer they present and paying realtor fees. "I will buy it fast for cash" will buy it fast, no hassles, no realtor fees, no waiting, no guessing. How does that affect your "fair market value?" By the way, they make offers. You decide if you accept the offer.

No, I don't buy in Illinois, sorry.

Jason Zundel · Answer

Short answer - no. Longer answer - no way. Fine, a bit more - in my experience, the majority of this type of advertisement is from scammers looking to get your information and escrow money and then disappear. Now, there are legitimate home buyers in this realm, but even the legitimate ones are looking for the desperate and will not be giving you the true market value. This is how they make their money - the process is VERY easy for you, usually a cash offer that is well less than the value of the home but allllmost reasonable and you don't have to do a thing. They then do a bit of rehab, wait a month or two, and then market it for a bit above the average market price to make their profit. At the end of the day, neither of these groups will give you genuine offers that will rival what you could make by putting a bit of work into the process.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

Caleb Brown · Answer

Others have said the same thing but they are typically wholesalers that will offer pennies on the dollar. If you want to sell off market join and put the deal in local groups. Best way to maximize your price is putting on the MLS

James Hamling · Answer

Can a "beat up" house get full price on the MLS? Inquiring minds want to know. ;-)I think I read that NAR research says the average prep cost for going onto the MLS is about $7,000. Will a realtor lend that to the potential seller to fix up the property so it will sell for top dollar on the MLS?If your referring to a "Reno-4-Sale" listing, yes, I do that.

But there is the but's...... Details to making it viable. There has to be correct details and #'s to it all. The people with 0 equtiy hoping to do a $50k reno on my dime on hopeum it will get there $350k property sold at $500k as a completely unsupported ARV, not-gonna-happen.

But for the Ma&Pa properties, 20-odd years outdated, big equity, and we can clearly see that $25k update-reno will get us $50k-$100k more on the sure-fire sale listing price, we-got-you!

And I am not alone in this regard. Several other pro-listing agents/brokers offer this same service.

Honestly it's a good way to separate the pro-listing agent's from the novices and noobs.

Pro's with time and a track record under our belt, we know what a property will sell at, how fast, in the various conditions, so we have absolute confidence in what the results will be. And, we have the network of vendors and GC's to get-r-done. As well as the critical piece, the $, we have that too.

Really the way I view it is like any investment. Will I invest $50k for a 97%+ probability pay-out in 6 months or less of a 10% return, securitized, heck yeah I will. That's a home-run investment, I'll do those every day.

$7k to getting a property in best list ready condition seems a fair average. Paint is common, pro cleaning, some carpet work, maybe a bit of flooring here n there, checking off some deferred maintenance...... Yeah, $7k burns up fast.

But when that $7k can make a $40k, $50k sale price difference, and yes I have seen that many times, it should be a no-brainer.

Ken M. · Answer

Agents willing to partner with owners that need updating, are a rare breed.

James Hamling · Answer

"Are these people/companies actually honest and would they give us a fair market value?" @Nic Hunt

1st piece, are they "honest". Some will be, and most will not be. 20/80. Who is, who isn't, all depends who you talk to, how you found them, what your talking about.

One thing is for certain, ALL of them are 4-profit. So the question at hand is HOW are they 4-profit. Is it via reselling your "deal" as a lead to someone else, or via actually taking on the property for themself as an investment "deal" themselves.

2nd part, will they give you "Fair Market Value"? Absolutely! BUT, your asking the wrong question, you need to ask WHO's "Fair Market Value" will they give you?

Is it THERE fmv, for what they can pay, do whatever there gonna do, and get the profits they want out of it?

OR is it YOUR fmv, as in the maximum you can get ANY buyer, of any type, to possibly pay?

Fair Market Value is a perceptual thing, it depends on what "Market" your talking about.

And by NOT putting it on the MLS, by NOT presenting it to the biggest market(s) available, what market are you talking about? The "market" of you and that 1 person on the phone? The "Market" of just the 4/5 "we buy homes" people you spoke to?

In general the term "Fair Market Value" speaks to using the MLS, the largest market place for single family homes in US, and what offers come out of that. What those buyers decide the value is.

So the answer should be simple; if you don't use the MLS, no, you'll almost certainly never get the MLS FMV because you never presented it to that market, never got the feedback from that market, so your left guessing what that market would say, right.

To me it seems a simple straight forward action plan:

Get it listed on the MLS. See what happens.

Same time, then talk with those "we buy homes" and see what they say.

If your at, say, $200k on MLS and nothing is happening and "we buy homes" people say they will give $100k, drop price on MLS too $150k, split the difference, see what happens.

Repeat as necessary until hit a point that your confident you have your highest and best offer in hand, then take it.

Simple.

No need to guess your way through it, take action, see what the market says vs guessing what the market would say if, if, if...... It's just too dang easy to actually find out what the market says vs guessing at it.

Bruce Woodruff · Answer

Thinkof it like this - these buyers are running a business, and they need to realize a profit. So there is no way that they can give you 'fair market value'.... they need some room for their profit...

Ken M. · Answer

You should expect to get about 70% of Zillow estimate, "as is". So, estimate what the value would be all fixed up, subtract the cost of doing that work to make it "market ready", subtract the realtor fees of 6%, subtract 2% concessions (on average), subtract closing costs, figure carrying costs for 90 days while waiting to sell and close, add MLS showing hassles, and you get an idea if it's worth selling "as is" or if you prefer fixing it up and listing on the MLS.

Chris Seveney · Answer

Many of those companies are wholesalers and if not investors. they are not going to give you close to market rate for your home.

Gabriel Watts · Answer

From my experience they are mostly just wholesalers who are looking to assign deals. At least that's what I see in south Texas. Legit companies, but not the actual buyers

Are the "We buy houses cash as is LLCs" for real?

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