Are you looking to sell your house but aren’t sure of the best route? While working with a real estate agent has many advantages, it’s not your only option.

You can sell your house to real estate investors or home buying companies who streamline the selling process and significantly cut your listing, marketing, and agent fees to take home more of your sale.

In this article you’ll learn about companies that buy houses in California and whether working with a real estate investor or cash home buyer is right for your unique situation or working with real estate agents is the better option.

What Are Home Buying Companies?

Home buying companies are businesses that will purchase your house from you with an all-cash offer. Because they pay the total price upfront, the process is much shorter as you won’t be working with lenders. You also have a much lower chance of the sale falling since the company’s offer isn’t dependent on obtaining financing.

Sellers work with cash home buyers when they want to sell fast, don’t want to deal with realtors, or have a complicated sale.

Because of the many advantages of selling to cash buyer companies, it’s rising in popularity. In April 2021, 23% of home purchases were cash sales, including traditional cash buyers and cash buyer companies.

What Does the Home Buyer Process Look Like?

Each home buyer process is a unique experience. Therefore, you will need to contact the companies you are considering to find out more about their requirements and the length of the process. For example, many cash home buyers operate online and do not require a walk-through or inspection, which can help you sell quickly.

Here is a general idea of the timeline with a home cash buyer:

You can complete a cash sale in just seven days to two weeks when working with a home buyer. However, delays or complications in the sale can prolong the process.

On the other hand, if your buyer accepts your house as-is, you won’t need to perform inspections or appraisals, which will streamline the process.

Home Cash Buyer Process Example: SoCal Home Buyers

Here is an example of SoCal’s buying process and how we simplify selling a house in California by speeding up the purchase process so that it is as painless as possible:

·       Step 1: Fill out a form with your contact information and your house’s address.

·       Step 2: We will call you to discuss more details about your home and make a fair offer

·       Step 3: Work with our inspector to quickly check your house to ensure you receive the best offer. We base our offer on current market value plus any repairs your house needs.

·       Step 4: Once you agree on an offer, you can choose the best closing date that fits your schedule

Our process can happen in as little as just seven days, a week shorter than many similar companies.

What Types of Home Buyers Are There?

Why are companies willing to buy homes for cash?

Real estate is a hot market with many lucrative opportunities for real estate investors and house flippers. Selling to a home buyer is a mutually beneficial arrangement. Real estate investors have the cash and time to fix up houses if you don’t want to make any repairs.

Meanwhile, you have the property but don’t want to invest the money or time into it before selling it. You can help each other achieve your goals by selling to the cash buyer company and receiving a quick sale while they receive a new investment property.

Here are a few examples of different types of companies that buy houses in any condition.

House Flippers

HGTV is filled with house flipping shows which give you a general idea of how these companies operate. In a house flipping situation, companies look for properties they can purchase at a price lower than their market value.

This is often because the property needs some repairs, which makes it difficult to sell at its full market value. However, the seller doesn’t always want to invest in performing the repairs.

The main goal of house flipper companies is to buy houses at a low cost and then sell them at a much higher price to gain a profit. Many house flippers will follow the 70% rule. This states that they shouldn’t spend more than 70% of a house’s after-repair value minus repair costs.

For example, if a house flipper calculates a house’s after-repair value to be $400,000 and repairs cost $50,000, 70% of the resulting amount equals a $245,000 final sale price for the home in its current state.

Buy and Hold Companies

Buy and hold real estate companies purchase houses for a long-term investment. They aren’t looking for a quick fixer-upper. Instead, they intend to perform minor repairs before renting it out to tenants. These include companies that buy your house and rent it back.

Buy and hold investors typically keep the property for over five years while renting it out. After that, they will either refinance or sell it for a profit.

Buy and hold companies build a profit over time from rental income, property appreciation, and tax benefits. These companies will then use their earnings to purchase new investment properties to increase their revenues further.

Long-term investments in real estate offer a high return. For example, over the last 20 years, housing sale prices have increased by over 238%. Because houses hold and build on their market value, buy and hold companies are likelier to make a better offer than house flippers.

iBuyers

Instant buyers, or iBuyers, are businesses that buy your house based on market research for real estate investment purposes. You fill in an online form and receive an instant offer based on their metrics. Online real estate buyers are ideal for those who want a quick and easy sale.

Since iBuyers don’t use inspections or appraisals in their process, you can receive your cash in just days. However, iBuyers are more expensive than other options because they charge a service fee of around 5.8%.

This is close to real estate commissions of 5-6% if you were to sell your house via traditional channels. In addition, they might also charge other fees to cover repairs, which might cost another 3%.

Despite these costs, iBuyer offers are comparable to traditional offers that include real estate agent fees. However, you don’t have the same hassle or additional inspection and marketing costs that quickly add up. Rather, you can sell your house faster and with greater ease.

Home Trade-in Companies

Some home buyers offer a trade-in program. This is for homebuyers who are selling their current property, then using those funds to purchase a new home. However, using your home sales to finance a new home relies heavily on timing and can easily land you in a tight spot if the two don’t line up.

This program can ease all that stress by purchasing your home from you. However, you can continue living in your house while you look for a new home. You don’t feel pressured to move out or finalize your sale based on a specific timeline. In addition, you have the cash from your sale to put towards the new house when the time comes.

When home trade-in programs purchase your house, they sell it to investors. The investors receive the house when you finalize the sale of your new home. These investors, in turn, will fix up your home and resell it or keep it as a buy-and-hold investment.

Local Real Estate Investors

Local real estate investors are family-owned house buying companies specializing in sales for a specific area. They invest in properties in that area, then use them as either flip or buy and hold investments. Because they are local, they understand the market better and are more concerned about your happiness with the sale than maximizing their profit.

When you’re selling a property, it isn’t just a house. It was a home filled with memories. Companies that work entirely online and purchase properties from across the country don’t often see your house as the sentimental part of your life it was.

However, local, family-owned investors do understand. They can offer a seamless house selling process that treats your home with respect and the value it deserves.

Who Will Benefit the Most from Home Buyers?

Home buyers aren’t for all sellers. However, here are seven common reasons someone might choose to sell their home to a home buying company.

Need an Urgent Sale

One of the most common reasons someone might work with a home buyer is because they need a fast sale. This might be because they’re relocating, need fast cash, or need their sale to match up with a new purchase.

On average, a traditional sale takes between 30 and 45 days, depending on whether the buyer obtains a conventional or FHA loan. In addition, roughly 22% of home sales don’t close on time. In addition, 5% of sales fall through, so you have to start from the beginning of the process.

Those delays or terminations can be very costly. However, selling to a home buyer ensures the process occurs on your schedule in the fastest, most convenient way possible. Many home buying companies even provide an instant cash offer.

Don’t Want to Deal with Realtors

The average realtor commission in California is 4.91% of your sale price. Since the average home in California costs around $600,000, you can easily spend over $29,000 in fees.

In addition to realtor fees, you also have the cost of marketing and listing your home. That adds a couple thousand more to your fees as professional photographers and videographers aren’t cheap.

If you don’t want to bleed money paying all these extra costs, you can sell your home without a realtor. If you sold your house as a “for sale by the owner” (FSBO) property, you would still need to pay for marketing and closing costs. However, selling through a home buyer cuts out all the extra costs.

Just Want to Get Rid of the Property

Not everyone is looking to make a profit from their sale. Sometimes, you end up with a house that’s more trouble than it’s worth, or you might have inherited a property you don’t want to deal with.

If that’s the case, you might not want to go through the long process of repairing, marketing, listing, negotiating, and waiting to get rid of the property.

Thankfully, there’s another option. Going through a home buyer allows you to offload unwanted property quickly and with the least amount of work on your end. To ensure you don’t run into issues, find a home buyer that accepts properties as-is.

In those cases, you won’t have to invest any more time, effort, or money into the property and quickly pass it on to someone else for cash you can use on something you do want.

Want a Hassle-Free Sale

Roughly 95% of home sellers reported feeling stressed by the selling process. Some common causes of stress include:

·       A lack of control over the timing

·       A lack of control over the money

·       Not knowing if you can sell the house

·       Not knowing whether buyers want the house

·       Concern an offer will fall through

·       Keeping the house clean and ready for tours

Home sales don’t have to be stressful. If sellers want to skip the stress, they can use a house buying company. Because you receive a cash offer, you don’t have to worry about it falling through.

In addition, the company often accepts it as-is, so you don’t have to stress over maintaining it and worrying no one will buy it.

Companies like SoCal Home Buyers even allow you to choose your closing date to eliminate the stress of timing so that the whole process is as simple as possible.

Aren’t Living in the House

Absentee owners are those who own property without living in it. For example, you might be a landlord, investor, or heir to the property. However, you reached a point where you no longer want or need the property. Now you’re ready to sell.

Because it isn’t your primary residence and you aren’t present to perform repairs or maintenance, selling the house can become a burden. You’ll constantly need to hire people who can perform tasks because you aren’t nearby to care for them, like maintaining the home for showings. In addition, you might not want to invest any more money into the property since it’s not your primary home.

Selling through a home buyer allows you to sell the property quickly and without hassle. In addition, you don’t even need to be present for any of the processes. This makes it much easier to sell if you aren’t local.

Don’t Want to Make Repairs

The average repair costs before selling your home range around 4% of your home’s sale price. While the national average comes to $11,700, Californian costs are much higher. Because of California’s more expensive housing market, the average house repairs can reach over $24,000.

Standard repair costs include:

·       Replacing old appliances

·       Patching holes and cracks

·       Repainting walls

·       Replacing carpet or laminate

·       Repairing your HVAC system

·       Replacing broken glass

·       Repairing your roof

These repairs can take a large piece of your profit. In addition, they can also take weeks to perform, which will delay your sale further. Listing your house on the market without performing those repairs can become just as costly as buyers will subtract those repair costs from their offer price. In addition, you risk failing inspections, which can lead to the entire sale falling apart.

The most reliable way to sell a house without performing necessary repairs is selling to a cash buyer. Cash buyers don’t have to meet the strict safety standards of traditional buyers who are working with a lender. In addition, cash buyers are often much more willing to purchase your home as is.

Dealing with a Nightmare Rental Property

Nightmare rental situations can lead to destroyed property or tenants that refuse to leave the property after their lease is up. When you’re ready to sell the property, these issues can cause significant roadblocks to your sale.

One option is to invest time and money in fixing the situation before putting the house on the market. However, during that time, you’re losing money on the property. So instead, you can sell the property to a cash buyer company who will take care of those issues for you. Then, you can walk away with cash ready for your next investment.

Who Should Use Realtors Instead?

Despite all the benefits of selling to a house buying company, some sellers would also benefit from using a realtor.

Want the Absolute Most You Can Get

When you sell a home without a realtor, it tends to go for 26% less. This is because realtors are experts in negotiation and know the best locations for listing your house. Because of their knowledge, they can get you the best price for your home.

If you are selling your home to get the most you can, you want to work with a realtor. Even with their commission fees, you can still make a significant profit.

However, this profit doesn’t come without a cost. Getting a reasonable price on your home won’t happen overnight. If you want a high price, you also have to be willing to wait until the right buyer comes along. Sometimes taking a small cut in your ideal price is worth it to sell it on your schedule and reduce the stress of waiting for the perfect buyer.

No Problem Waiting for Sale

The average home spends 25 days on the market. So, in addition to the time it takes to get an offer you want, you also have to wait to close the sale. This can be an additional 30 to 45 days. Altogether, expect your home sale to take at least two and a half months.

If you’re not in a rush to sell your house, you won’t have an issue waiting for the best price on the market. However, you should also be ready for delays that might prolong the process and make accommodations for inspectors and appraisers who come by the house during that time.

Can Afford the Extra Fees

The average seller costs in California are at least $51,561.

These costs include:

·  Real estate commission

·  Closing cost assistance

·  Repairs and upgrades

·  Marketing

California has some of the lowest home seller costs in the country, based on the average percentage of your sale cost. However, because houses in California are more expensive than average, those costs quickly skyrocket.

Sometimes those costs are worth paying for the profit you can expect from the sale, especially if your house is in a highly sought-after area where you know you will get many offers above market value. In those cases, investing tens of thousands of dollars to fix your home and sell to the highest bid makes sense.

However, not everyone has the funds to invest in those costs. That’s when you might want to consider alternative methods for selling your house without breaking your bank.

Have the Time and Resources to Make Repairs

Repairs are a costly and involved part of selling your house. Unfortunately, those costs quickly increase, from painting your walls to fixing old appliances. However, if your home is in high demand, taking the time to make those repairs will boost your market value.

How do you know whether those repairs are worth the cost and effort and when to sell as-is?

The easiest way to decide is to ask whether the repair will boost your house’s market value more than it costs. For example, brand new appliances might cost a couple of hundred dollars but increase your house’s market value by over a thousand dollars.

However, if you have extensive damage, like mold or water damage, you will have to invest significantly more to make your house appealing to buyers.

In that case, you may make more by selling it as-is to a home buyer company.

No Issues with Any Tenants

While there are bad tenants, many supportive tenants take good care of your property and are ready to leave by the time their contract is up. In those cases, you will not have any issues selling the property.

If you don’t want to lose any money by having a property sitting empty, you might even consider starting to show the property while the tenants are still living in it. It will show well if they are very clean and respectful of the property, and you can sell quickly.

Otherwise, you will have to wait till they move out and spend another month or two repairing all their damage before you can even list it. In those cases, a home buyer is your better option to ensure you aren’t taking too large of a hit by leaving your property empty.

Tips for Selling Your House to a Company for Cash

You’re ready to sell your house to a home buyer.

Now what?

Use these tips to help you find the right fit for your situation.

Find One You Trust

Selling a house is a considerable risk because the wrong cash home buying companies can cost you thousands of dollars in low offers and unexpected fees. You have to feel comfortable with the company and confident they’re offering you the best price.

Reading reviews, talking with them on the phone, and knowing their mission and values are some ways you can learn about them and decide if you trust their offer and that they have your best interest at heart.

Don’t Go with Companies that Treat You Like a Number

You are in control when selling your house to a home buyer. There are many good, caring companies available. Therefore, don’t feel like you have to settle for a company just because they are one of the largest companies.

Many large house buying companies might have dozens of reviews but also deal with thousands of home sellers. You can quickly become another number, leading to a negative experience or a low offer. Some of the best home buyers are smaller investment companies, local businesses, or family-owned mom-and-pop-type companies that genuinely care about their sellers.

Look for Hidden Fees

Home buyers can be a cost-effective alternative to selling through a realtor. However, that’s not always the case. Some cash home buyers have hidden fees or quietly tack on costs along the way you didn’t account for.

Asking for a precise quote and understanding their fee structure will help you choose a company that is transparent about their fees and ensures you walk away with the best offer and don’t lose money in the sale.

Go with the Easier Options

Most of the reasons a seller chooses a house buying company is for the ease of selling to a cash buyer. If the process is too convoluted and lengthy, it defeats your purpose in choosing them.

The streamlined purchase process makes home buyers worth the slightly lower sales price. That is far more valuable because you save time, resources, and energy by having a quick and convenient sale. A transparent home buyer will clearly outline the steps of their process, which you can use to evaluate their ease.

6 Best Companies That Buy Houses in California for Cash

Are you looking to sell your house for cash? Here are six companies you can trust with reliable and speedy service.

1. SoCal Home Buyers

SoCal Home Buyers is a family-owned local home buyer in California. They offer professional and friendly home buying services that allow you to sell your home as-is, no matter your circumstances.

SoCal offers many benefits, including:

· Closing on a day you choose

·  No fees, closing costs, or expensive commissions

·  Convenient transactions for busy homeowners

Pros:

·       They are a family-owned business that cares about each customer

·       They treat each property with respect

·       They have no hidden fees

·       They accept houses in any condition and situation

Cons:

·       They are only available in California as they are a family-owned local investor instead of a large corporation

·       Your cash offer is fair for cash home buyers but might not match what you could get if you shopped for offers on a traditional market with a real estate agent

2. Offerpad

Offerpad is one of the largest iBuyer companies that makes cash offers on homes. To receive a quote, you fill out a short questionnaire about your home and receive a cash offer. You can also use their virtual tour features to show your home to the buyers for a more accurate quote.

They charge a 5% service fee, and closing costs equal roughly 1% of your home’s market value. However, they make higher offers than other iBuyers to offset some of their expenses.

Pros:

·       They are reputable with many positive reviews

·       The process is straightforward and can be done entirely virtually

Cons:

·       They are a large company with very little personalization

·       They charge several fees that add up to roughly 6% of your home’s market value

3. WeBuyHouses.com

WeBuyHouses.com has several independently owned shops around the country, each run by a local real estate investor. Because of this diversity, you will see very different offers and experiences between shops.

WeBuyHouses.com is BBB accredited and covers all your closing costs. Most customers have a positive experience.

Pros:

·       They will buy most houses as-is

·       They have a very short close period

·       They cover your closing costs

Cons:

·       Each location has different strategies, processes, and offers

·       There is only one available WeBuyHouses.com in each area, so you can’t shop around for the best offer

4. HomeVestors

HomeVestors is a large, national cash buyer company with independently owned local franchises. They are also the parent company of We Buy Ugly Houses.

Pros:

·       Available all over the country

·       Buys houses as-is

Cons:

·       Slower close than some other cash buyers

·       Lower cash offers as low as 55% of the home’s after-repair value

5. Opendoor

Opendoor is an iBuying company with high online reviews and offers a quick and uncomplicated purchase process. They are also willing to purchase in different conditions. They work in over 45 areas around the country.

Pros:

·       Opendoor has many positive reviews

·       They offer several additional services that help with the buying and selling experience

Cons:

·       You have limited closing date flexibility

·       They charge 5% in fees

·       Their closing time is between 14 and 60 days

6. Sundae

Sunday isn’t a traditional home buyer. Rather, it’s a site where you can input your home details and receive multiple cash offers from local investors. Its system allows you to compare offers and find the best market value for your home.

Pros:

·       You can compare offers to find a better cash offer

·       You don’t have to market or show your home

·       Investors purchase your home as-is

·       There are no fees

Cons:

·       The bidding results in a longer process

·       There are limited locations

FAQs

Do you still have questions? Look at the following answers or reach out to us directly and ask our real estate experts.

Yes, companies that offer cash for your home are legitimate. The most legitimate companies are those that respect you and your home and don’t treat you like a number.

These companies care about you as much as the transaction and aim to make you feel comfortable, simplifying the transaction and offering you a fair market value.

Real estate investors eliminate many of your closing costs and fees, like real estate agent commissions.

It’s also much faster than regular sales and saves you energy and money you otherwise would have to invest in repairs.

Cash sales, on average, take about two weeks to complete. However, some home buyers can process sales faster, while others might take longer depending on their process and whether they require inspections.

Many home buying companies will cover most of your closing costs. However, some will charge average service fees ranging from 1 to 6%. Ask your home buyer what fees they charge before choosing one, as there are some options with little to no costs to you.

If you don’t want to work with a realtor but don’t want to sell to an investor, consider listing your property for sale by owner. In this case, you act like your own realtor by performing all the marketing tasks and listing procedures on your own. This requires a significant financial and time commitment on your part but attracts traditional buyers.

Home Selling Made Simple

We understand that selling your home can be stressful and emotional. That’s why we want to provide the most comprehensive resources and knowledge you need to make the best decision for yourself, whether that is selling through a realtor or a home buying company that will buy houses as-is.

Contact us if you need help understanding the home buying process or are interested in selling your home to a small, family-owned investment company.

Let our real estate experts walk you through our process and help you feel comfortable with your choice.

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