The pros and cons of selling to a We Buy Houses company in Knoxville, TN
Plus, how to find the best buyers and avoid the common pitfalls many home sellers make
You’ve probably seen more ‘We Buy Houses in Knoxville’ signs around town and ads on Facebook. So, are these scammers or legitimate home buyers? How can you tell the difference? What are the real advantages and disadvantages of selling to these buyers? When is it the right decision?
East TN Home Buyers: Scam Or Real?
There are real cash home buyers out there. According to ATTOM Data, although the percentage of cash home purchases hit a new 12 year low in 2019, 24% of all home sales were for cash.
This trend is likely a combination of two main factors. The first being investors and consumers running out of liquid cash after years of purchasing homes for all cash. Interest rates have also continued to stay low, meaning it makes more sense for most regular home buyers to use financing. Plus, of course, on average, only the top 10% of Americans have at least $10,000 saved to buy a home. Not nearly enough to pay for an entire home. Investors may have also pulled back in the last two years. Rumors of a new recession mean more would rather use other people’s money to invest than to put their own on the line in a declining market.
So, there are real cash home buyers out there. Though there may be far fewer than you think. They are declining in number too.
Many home buyers and new real estate investors might claim to be cash buyers, but not really intend to pay cash. They want to sound like strong buyers, but will then go to the bank or other partners to fund the deal. Or they’ll just tie up your home in contract, and hope they can flip it to someone else before the scheduled closing date.
Keep reading to find out the difference between these buyers, and what to look for in a real cash buyer.
The Advantage Of Selling Your Home To Tennessee Cash Home Buyers
There’s more than one way to sell your home. Until recently, finding cash paying TN homebuyers hasn’t always been fast or easy. Though it has many advantages.
Listing with a Real Estate Agent
One of the most common paths when it comes time to sell a home is to find a local real estate brokerage and list your home for sale on the MLS.
This can help your house potentially get lots of exposure. If you have a premium listing spot, price it right, have awesome pictures and videos, a professionally written property description and offer enough incentives to other real estate brokers, you might get lots of visibility.
Unfortunately, on average you can expect it to take months to find a buyer, and even longer to close on the sale. It will also cost you a significant amount in Realtor commissions. The faster you want to sell, the more you’ll have to offer your listing agent and other buyers’ agents. That may average around 6% of the sales price. It can be a lot more on cheaper and high end luxury homes.
For Sale By Owner & Owner Financing
Those who want to skip getting tied into long and expensive listing agreements often default to the for sale by owner (FSBO) route.
That’s putting a sign in your yard, running newspaper ads, posting on Craigslist, etc. This has it’s pros and cons too. Obviously these methods aren’t very practical or effective any more. Some will cost you money, when you are trying to make money by selling your home.
Then you’ll have to field all the calls from multiple buyers who aren’t really qualified, criminals, and more often than not, most all dozens of real estate agents desperately looking to pick up more listings.
When you pursue this option you will often end up financing the new buyer as well. Instead of getting a lump sum of cash, you’ll be acting as the bank, and will get your money in monthly payments over a few years. This can have pros and cons. You may pay less in taxes on the money you get. Though it may not help if you really need cash not to move somewhere else or to pay emergency medical expenses.
Selling to Cash Paying TN Homebuyers
If you can find them, selling direct to a qualified cash home buyer offers some great perks. You don’t have to pay those big Realtor commissions. You don’t have to pay for your own advertising. You can get rid of the burden now. You can get your cash right now. You can close in just a few days, instead of spending many sleepless weeks waiting to see if a sale really comes through.
Types Of We Buy Houses Buyers In Knoxville, TN
Aside from all the fake cash home buyers and ‘we buy houses in Knoxville’ signs, there are three main types of real cash buyers.
1. Big iBuyer Companies
Recently a lot of really big corporations have seen the opportunity to take money from big hedge funds and banks and use it to buy and flip houses. These online iBuyers typically focus on a very tight criteria of home they are looking for. Often they are or partner with Realtors. That means they often charge real estate commissions. These fees can often be far more than regular Realtor commissions. Expect to pay 7% or more of the sales price for this fee. Plus other miscellaneous costs. Then they’ll throw some paint on it, and list it for more a few days later without really doing much in the way of improvements.
2. Out Of State Wholesalers
Thanks to technology, real estate investors can now operate anywhere, from anywhere. They can be on the beach in the Cayman islands and be making offers on homes across the US. Most will get properties under contract and then sell that contract to another investor before the closing date. If they can find one in time. There’s nothing really wrong with this. The problem is when they can’t resell it and have wasted weeks of your time. You can’t afford that.
Out of state buyers who don’t know the market will often seriously under value your property. Or they will overlook critical factors related to the local market. So, they may offer a lot less than you deserve. Or they may miss something which derails your transaction later.
3. Real Local Cash Home Buyers
Then there are real local cash home buyers, like East TN Homebuyers. They may be more rare. Yet, they know the market and they care about the community. East TN Homebuyers buys houses for cash in Knoxville, Farragut, Oak Ridge and Maryville, TN. We care about our sellers. We care about renovating homes carefully, and providing safe, healthy places for new families. We look to create great solutions for everyone.
What Should I Look For In A Cash Home Buyer Near Me?
What should you be looking for in a cash buyer for your home?
Costs & Fees
What costs and fees are involved in selling to them? Are they going to try to charge you for buying your home? Are they really just referring you to an agent who will charge you commission? Or will they actually pick up some of the common costs you’d pay with other buyers? This way you actually put the most money in your pocket. Even more than what might be higher top line numbers.
Are they really a qualified cash buyer? Can they provide a proof of funds letter?
What Will They Do With Your Home?
For most home sellers it doesn’t really matter. Yet, it might feel nice to know that you are selling to someone who won’t just cover up mold or damage and stick some poor unsuspecting buyer with it. It may be nice to know they won’t just neglect it, leave it overgrown and fail to pay the taxes so all your old neighbors have to foot the bill and suffer financial damage.
Reviews & Testimonials
Do they have real testimonials and reviews from other local home buyers who have good things to say about them?
Helpful Vs. Hard Sales
When you call and speak to them, are they just trying to hard sell you? Are they just fast talking, wanting you to sign without understanding it, and trying to hammer you on price? Or are they taking their time to understand your situation, real needs, answering your questions and concerns and coming up with a fair solution.
Right Fit For You & Your Home
Do they actively want to buy this type of property? It’s not always a good fit? If they are really looking for larger, almost new homes in certain neighborhoods, and yours isn’t that at all, it’s better not to try and force it. Chances are they will offer you too little, or not follow through. Find someone who really wants you type of property and has experience buying a home in this scenario.
Can I Really Sell My Home In ANY Condition?
Some buyers will say they will buy your home as-is, but then try to renegotiate, get you to make repairs or slash their price further during the process. Some just want to buy homes they can throw some paint on, cut the grass and resell for a profit.
Others will really buy homes in any condition. It can have mold, leaky roofs, foundation problems, be seriously outdated, or even be burned out. Of course, you have to take this into consideration in the price you will accept. Yet, it’s great to find a buyer who will take it off your hands. Otherwise it will continue to devalue and rack up thousands in fines and bills.
Common Situations When It Is Smart To Sell Your Home Fast for Cash
Anytime you want to sell your home fast, without all the junk fees, and without all of the uncertainty, it can pay to choose a we buy houses company in Knoxville that can really follow through.
There are also some common situations when it is really critical to sell to a cash buyer fast too.
Poor Property Condition
If your property isn’t in good condition it is likely to keep on deteriorating. You may not want to gamble on repairs and improvements right now. That means problems will get worse, and the value will keep going down too. The faster you sell the better.
Liens & Code violations
Liens against your property can escalate at as much as $1,000 per day. There is no way to keep up with that. Before you know it you will owe more on your property than it is worth. You might have to pay to get rid of it.
Past Due Taxes
Past due property taxes and income taxes can also threaten your ability to keep your home. It can be better to sell and get something for it, than to wait and lose it all.
Despite the great intentions, inherited property can be far more of a burden than you’d expect. It requires maintenance, utility bills, taxes, association dues and more. All even if there isn’t a mortgage on the property. Left empty it can be a liability. It may be vandalized, attract squatters, and keep going down in value.
If you need to move for work or to be with family, you don’t want to be juggling two separate house payments. It’s far better to shed one and to be able to sleep better at night than the financial risk.
Even if you are just about to fall behind on mortgage payments, the attorneys fees, late fees and other penalties can make it virtually impossible to catch up. The longer you wait, the less equity you’ll have, and less you can walk away with.
As house prices start to go down or neighbors struggle to keep up with mortgages they can take your home value down too. It’s a downward spiral that can move much faster than you might think.
Get A Fair Offer On Your Home Today
We are the real deal. Check out our testimonials of the many other local homeowners we’ve helped, and who really loved their offers.
No matter what challenges you’ve had in trying to sell your home in east TN before, give us a chance to show how we can help you.