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
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”
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?
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?
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.