You may have seen ads for “We Buy Ugly Houses,” a company that will make a cash offer for your property as-is, even if it’s not in great shape.
The value proposition is that they’ll take the property off your hands quickly so you don’t have to deal with unloading it via the traditional route, which is either through a real estate agent or via a FSBO listing.
In both alternatives, it will take time to sell your property. That’s why companies like We Buy Ugly Houses exist, so you can get cash for your home a lot faster, making a typically illiquid asset a more liquid one, like a stock or savings account.
Additionally, you can sell your home in its current state, even if it’s not in great shape, or even bad shape. If you attempted that via a traditional real estate listing, you’d probably face a lot of scrutiny and difficulty in selling your home.
How We Buy Ugly Houses Works
- You ask them to make an offer on your home
- They conduct a home inspection and appraise the property
- If interested in buying they give you a no-obligation all-cash offer
- And even pay some of the closing costs
I checked out their website, read their FAQ, and think I have a pretty good understanding about how the process works. It seems fairly straightforward.
Basically you ask them to make an offer on your home and they’ll show up to take a look at the property. They’ll conduct a walk-through, and probably do some appraising once they get back to the office to better understand the property market where your home is located.
After all, the property itself is just one piece of the pie – its location is also key to valuing it properly, especially since the home’s current state will likely be improved before it is resold by the company.
From there you’ll receive a “no-obligation all cash offer” to purchase your home that you can consider, accept, or reject. If you agree, they will apparently pay “most normal closing costs” and you won’t have to worry about things like real estate commissions or make repairs.
So the upside here is that if you need/want to sell your home ASAP, you might be able to with a buyer like We Buy Ugly Houses with little or no work.
How They Define an “Ugly House”
- It’s not just the outward appearance that qualifies as ugly
- They’ll even consider homes with foundation issues
- Those in undesirable neighborhoods
- And those in which you simply want to unload because of a bad mortgage, bad memory, and more
Interestingly, it’s not just outwardly ugly homes that are considered “ugly.” Sure, those are ugly too, but it’s much more than that.
They also consider homes ugly if they have foundation issues, if they’re in undesirable neighborhoods, or simply in an area you no longer feel is convenient (such as a long commute to a new job).
They also offer to buy homes when the mortgage financing isn’t ideal, perhaps because of a high interest rate and the inability to refinance, or an adjustable-rate mortgage that becomes too expensive. Someone facing the prospect of foreclosure could also potentially own an ugly home.
Oh, and let’s not forget homes that are simply ugly because of some bad memory, such as a divorce or something much worse.
They also seem to target homes with problematic renters, or homes that were inherited that the family doesn’t want to deal with.
Then there are the typical ugly houses, such as those in disrepair, those with water damage, termites, roof damage, or simply those that have been neglected or aged terribly.
How They Determine Their Cash Offer
– Current condition of your property
– Renovations required and cost to repair
– Time needed to make said improvements
– Cost to keep the property while it’s being repaired/resold
– Retail value of your property once repairs are made
– Real estate commissions required to sell the home after buying it from you
Benefits of Selling Via We Buy Ugly Houses
– Don’t have to make repairs or make your home look snazzy for a sale
– Don’t need to hire a real estate agent
– Much faster than selling via a traditional listing
– Little to no work on your part
– Don’t have to pay real estate commissions
– They pay most closing costs
– Get cash for your home faster
Who Are They?
- The company is actually called HomeVestors of America
- Which is the nation’s #1 home buyer per their website
- Their headquarters are in Dallas, TX
- And they operate a franchise model with a presence in 33 states
Now that we know a bit about the process, you might be wondering who We Buy Ugly Houses are, seeing that they have “We” in the name of the company.
Well, it’s actually a company called HomeVestors of America, which is apparently America’s #1 Home Buyer, per their website. They are headquartered in Dallas, Texas and have nearly 200 independently owned franchisees in some 33 states.
In fact, they claim to be the largest franchisor in the buying houses for cash business. However, some people might be confused as to who they’re actually working with because this motivated selling thing has become mainstream.
If you drive around any major city you’ll probably see signs posted on light poles or in stakes on the ground with pitches like, “Sell your home fast.”
The company We Buy Ugly Homes actually runs commercials on TV stations like CNN, so be sure you actually know who you’re working with.
What Types of Properties Do They Buy?
– Single-family homes
– Multi-tenant properties
– Some commercial properties
They do not buy mobile homes.
Can You Make Your House Not Ugly?
- While they may be able to help you sell your property quick
- It might be in your best interest to make your house more marketable
- That way you can fetch a higher sales price
- And these days there are plenty of discount brokerages that don’t charge much
In a nutshell, this company helps motivated sellers unload their properties fast for cash. That’s the draw. If you want to ditch the real estate agent and avoid closing delays and the usual hubbub, a company like We Buy Ugly Houses could be just the ticket.
However, you also have to ask yourself why you need to sell your home immediately for cash. Is there something you can do to make your property more marketable so you don’t need to resort to a quick sale?
Can you make some minor improvements, clean up the water damage, exterminate the termites, throw on a new coat of paint, boost the curb appeal, or work with your ex-spouse or family members to find a better price for your old or inherited home?
At minimum, you should at least see what your home is worth on the open market, instead of just taking an offer from any one company. That’s the very nature of real estate. It’s a free market that works on the laws of supply and demand.
If you don’t even bother to see what others might offer for your home, you’ll never unlock its true value. Sure, you might not want to use a real estate agent, but there are other options like FSBO or Zillow’s Make Me Move or any other number of options that should also be explored. You could also try other companies like We Buy Ugly Houses, there seem to be lots of them out there.
In summary, while these companies might be legit, you may not get what you want for your home, or anywhere close to it. If that’s okay with you then great, but if you want more for your home, you’ll probably need to put in the time and work to put it in front of more prospective buyers.
Interested. I have,a commercial property
If you are thinking of selling to an entity like homevestors, then call them, get a quote, which is good for a period of time, and then take the effort to list it with an agent a little above that price. For example. If your house is worth $100K, and homevestors offers $74K. List your house for 30 days at $84K. That allows you to pay the realtor and concessions to buyer, and still net about $76K, a gain of $2K to you. Plus. putting it up for $84K when it is worth $100K might lead to numerous offers, including over list price. You might get $89K, increasing your gain. Back in 2009 I would not say to do this, but now, with the sellers market we are in, I think it is worth at least a try. Just make sure you talk to an experienced realtor and one that will give you the correct numbers and also allow a short term listing. You either sell it, or you then take the ugly house offer. No negative in trying first though. 🙂 That’s my thought.
I just want an estimate on what you would offer me for my house. It has been on the market for 8 months and nothing. We have a son who is deathly ill and need to get moved closer to him.
You may want to reach out to the company directly…this is merely a review of the company.
I have a double wide mobile home which sits on a 1/4 acre lot. It is currently occupied by a family member and some friends. Do you buy mobile homes?
They don’t buy mobile homes, as noted in the post.
DO they purchase homes in Kansas? I live in Independence.
Mr. Real Estate,
Thank you for this insightful review. Do you have an idea of what percent of the current market value a company like we buy ugly houses would offer? Also interesting to see other questions here, this is a review not the actual company. lol
I’m sure it varies widely depending on the property in question, and what repairs are necessary, if any. It could be anywhere from 5-10% (or more) below market value, but then there might also be costs for repairs that drive the sales price down even more. And the time it takes to do the repairs and market it. Of course, the same thing could happen on a normal sale, with the buyers requesting credits for repairs, or a lower sales price in lieu of them.
You bet you should sell them your old house. Most people don’t want to deal with the hassle’s of clean out, rehabs and getting the home back up to standards. When you sell your house for cash, you’re not having to pay commissions and depending on the contracts, no closing costs either. It’s a win win for both parties.
It’s worth noting also that some of the “We Buy Ugly Houses” signs on the street are scams – so be wary of that when you’re looking into these companies!
Another thing to look for is foreign vs. local investors. Local investors are likely to put more consideration into how their flips affect the community as a whole – because they’re a part of it.
An ugly home can take time to get sold. Companies like SellAnyHome.com specialize in buying all kinds of homes. Simply use the home evaluation tool to get an instant home evaluation.
We can sell our ugly house after repair it and remodel it and this is best for us. If we renovate our home it will make costly our house and we can get more price on our house by sale it.
Would someone email me at the email listed about my ugly home that has been on market for just over 3 months with only one offer and offer was too low and i would like to rid house I’m in central California, arroyo grande
Where can you find the houses for sale after you’ve finished remodeling
I have owned several properties, including one custom built . A few got so nuts from the underwriters I almost backed out. A cash deal can be handled by a competent lawyer & is much more simple & pleasant.
These can be a life saver for some people. however, BEWARE, they will prey on your situation and take advantage once they have you locked in. It has happened to my clients.
Get a evaluation of your home by a Realtor, then use that information. to make your decision.
There are many regular folks buying “fixer Uppers” for cash.
Do NOT use them. I accepted an offer from HomeVestors in the Tampa area. I agreed to wait 5 weeks to close, but 1 week before closing, they canceled. They did not even notify me. I was told that the transaction would not be closing when I contacted the Title Company to schedule an appointment to sign the closing documents. According to HomeVestors I was to be given the $500 earnest money. They never paid the Title Company the $500 earnest money! Now I am trying to get HomeVestors to pay me the $500. Since they are no longer answering my question as to when, it looks like we will be going to court. DO NOT TRUST THEM. As other people posted, use a Realtor and price it to sell.
In no way should you EVER sell to these people. They say it is a “lifesaver” but it has been a nightmare! Stringing me along for months as I made payments and then after signing to paperwork… I am STILL MAKING PAYMENTS. No customer service number, lawyer doesn’t return calls, Real Estate agent doesn’t return calls or texts, All persons contacted have full mailboxes so not even a message can be left. Meanwhile my account sits in the negative as I thought this was a sale not a rip off as it is. This ruined my thanksgiving and soon to be Christmas. Please don’t sell them your house. A lawsuit is my only recourse.
Here’s a very valuable consideration.
Typically you’re going to lose about 10% on a traditional sale to realtor commissions/fees and closing costs, as well as repairs. So you’re going to get about $180k for a house selling at $200k.
Now, if you take that same house and one of these companies offers you $180 or more, you’re coming out ahead. Then, if they offer less, you have to ask yourself if they amount less, is worth it to just not have the hassle of selling it.
My husband and I are considering an offer made by Home Vestors, but have great concerns about the language in their purchase agreement, We’ve sought outside council to review and have been told to RUN AWAY that when you lock-in they immediately put a lien on your property with the local courthouse. They can then stall closings for up to ONE YEAR and you can’t sell to anyone else. We countering to have some language struck. Tried to counter with standard GAR form but they added STIP that their form overwrote the other.
I began this process with We Buy Ugly Houses in January, the 8th to be exact! Today is May 4th and I’m still getting the run around. My agent has gone so far as to tell me TWICE that he’s shown my house. I sat up the road and watched, no one ever showed up, not even the agent!!! I am beginning to realize that this is their Sales tactics designed to wear you down!
My daughter is tangled up in this now. Its been a headache. Now she is 2 weeks from closing and they have decided AFTER making offer in writing they are dropping offer by 10,000 or no deal. STAY AWAY!
They won’t even offer you half of your property’s value. We just got a quote and it was insulting. They are out to steal property from owners and flip for extremely high profit.