You’ve seen “We Buy Ugly Houses” advertisements online, in flyers, or even on utility poles followed by a phone number.
What is We Buy Ugly Houses, though? Is this a fraud?
The majority of We Buy Ugly Houses reviews indicate that the firm is not a fraud. The actual franchise operators operating under the We Buy Unattractive Houses brand name are cash home purchasers who, indeed, purchase ugly properties.
The drawback is that some We Buy Ugly Houses franchisees are unlikely to pay anything close to the property’s true market value or what you could earn by selling it traditionally.
This is the price you pay for a quick and simple transaction. According to some estimates, We Buy Ugly Houses pays as low as 50% of a property’s true market value, which is a costly price to pay for convenience.
More on We Buy Ugly Houses
We Buy Ugly Houses purchase homes for cash and make cash offers on foreclosed properties. They will pay between 50 and 70% of a property’s fair market value, depending on its condition.
These organizations target desperate property sellers in great need of cash, such as those whose properties are nearing foreclosure or whose owners are experiencing a difficult period such as divorce or a death in the family.
After rehabilitating the property, they resell or rent it. You must have seen flyers and posters with the phrase “We Buy Ugly Houses” and a phone number affixed to poles around the United States.
These are actual businesses operating under the We Buy Ugly Houses brand owned by HomeVestors.
What is the We Buy Ugly Houses process?
If you sell your property to We Buy Ugly Houses, you may follow these steps below:
Submit details about your residence by contacting your local We Buy Ugly Houses franchisee online or over the phone and provide basic information about your home, such its location, age, condition, and square footage, among other details.
Schedule a check-up with Buy Ugly Houses who will then conduct a property inspection, often within 24 hours. After evaluating the property, a corporate agent will submit a cash offer. Typically, this offer is non-negotiable; it is a “take it or leave it” offer.
You’re in the position to accept or reject the offer. If you accept this offer, you will sign a purchase agreement and decide on a closing date. Since there is no financing involved, cash buyers like We Buy Ugly Houses may give far more flexibility on closing dates than typical buyers.
Get paid and close the transaction within two to five weeks.
What will We Buy Ugly Houses Pay You?
We Buy Ugly Houses will pay up to 50% of the home’s market value. The organization adheres to the well-known 70% guideline for property flipping.
For a buyer to consistently make a profit on a property, they should pay no more than 70% of the property’s after-repair value (ARV), less the cost of repairs and improvements.
One source indicates that We Buy Ugly Houses franchisees seek to pay between 55 and 65% of a home’s after-repair value (ARV).
Even if the information the firm uses to determine the worth of your house is accurate, the offer you receive will be decreased.
Which Areas Is We Buy Ugly Houses Active In?
There are 1,100 We Buy Ugly Houses sites in 45 states, with several locations in many towns and counties. These sites are independently run franchises that have received training from the HomeVestors brand.
HomeVestors provides We Buy Ugly Houses franchisees with constant assistance. They assist clients to create their real estate portfolios by purchasing properties at a bargain, remodeling them, and selling or renting them to homebuyers.
Is We Buy Ugly Houses a legitimate business?
Since 1996, We Buy Ugly Houses has been one of the most well-known cash property purchasers in America.
HomeVestors of America, Inc., located in Dallas, is the owner of the HomeVestors of America, Inc. trademark, a real estate brand that makes cash offers for worn-out, neglected, and undesirable properties.
The organization reports that HomeVestors and We Buy Ugly Houses franchisees have acquired more than one hundred thousand properties countrywide.
If you negotiate with a We Buy Ugly Houses franchise owner, you are essentially selling your property to an independent contractor. Visit review sites like Google and Trustpilot to check out We Buy Ugly Houses reviews.
Pros and Cons of We Buy Ugly Houses
When you work with We Buy Ugly Houses, everything moves at light speed. A representative will view your home within a few days after first contact, and will frequently make an on-the-spot cash offer. As soon as you accept the offer, you can close within two weeks. This is in stark contrast to the conventional selling procedure, which, in the best-case scenario, takes at least two months.
Unless your home has broad appeal, you will enter a conventional sale with more questions than answers. How much time will it take to locate a buyer? Will you locate a purchaser? Will you receive more or less than your asking price? Will you be able to close before the end of the year, or will it take months?
We Buy Ugly Houses provides answers to nearly all of these questions. As its name says, We Buy Ugly Houses will not purchase very few houses, if any.
No Extra Costs
The typical method of selling a property incurs significant expenses; between the commission and closing charges, sellers might spend up to 10% of the transaction price.
We Buy Ugly Houses does not need the seller to negotiate a reduced fee or reduce closing expenses, as there are none. However, this is one of the reasons why We Buy Ugly Houses cash offers are so much below market value.
Saves You from Repairs
Putting a run-down house on the market needs extensive repairs and remodeling. This requires time and money. However, if you sell it to a cash buyer like We Buy Ugly Houses, they will accept it as-is. This is the way to go if you want a quick transaction with no upfront out-of-pocket expenses.
We Buy Ugly Houses makes offers far below market value. This is due in part to the fact that it frequently purchases properties that require repairs and improvements before they can be resold.
However, a portion of this is inherent to the business model. We Buy Ugly Houses is aware that many sellers are under external demands and will accept an extremely low price to close the deal.
Since every dollar below fair market value that a firm can avoid paying is a dollar of profit, it will make the lowest possible offer, typically as low as 50% below market value.
Some franchisees utilize high-pressure techniques to convince sellers to accept incredibly cheap offers. While this is probably not HomeVestors’ official policy, there are several incidents of franchisees employing questionable and maybe unethical practices.
What Alternatives Are There?
We Buy Ugly Houses serves a true need among home sellers. It can be a realistic alternative if you want to sell a home fast and without the hassle and you are not concerned with maximizing your profit.
Nonetheless, if you’re not convinced with what We Buy Ugly Houses has to offer, consider the following alternatives for selling your home:
For sale by owner (FSBO) transaction involves the homeowner is responsible for all marketing and negotiations.
A typical listing with an agent sells for around $80,000 more than an FSBO listing. Your improved earnings will more than compensate for the seller closing fees and commission you’ll be paying, especially if you hire an agent who has agreed to work for a lower commission.
iBuyers are another sort of firm that purchases homes for cash. These companies make immediate bids for property and can close within a week.
iBuyers does not pay the true market value for properties, but its bids are more likely to be accepted than those of We Buy Ugly Houses.
However, despite the fact that iBuyers pay full cash and may close quickly, they have higher requirements for the property. For instance, iBuyers typically do not purchase residences built before 1950 or in need of considerable renovations.
One of the most reputed iBuyer companies is Offerpad. Apart from their stellar customer service and seamless process, you must be wondering how much does Offerpad charge for repairs? They typically charge about 1-2% of the total transaction value.
We Buy Ugly Houses enables motivated sellers to quickly dispose of their property for cash. However, you must consider why you must sell your property for cash fast.
If your home can be remodeled quickly and advertised through the correct channels, would you want a rapid sale or would you rather complete the renovations and then sell the property? Should you opt to sell quickly or intelligently?
You will save far more money if you sell your house methodically. With Houzeo’s flat fee MLS; you may list your home on the MLS in less than one hour and immediately save 3% on the listing agent’s commission!
Houzeo has digitized all documentation, and the software automatically populates recurring information from public data sources to streamline the listing process. It is possible to browse offers, negotiate, follow offer updates, etc. With Houzeo’s mobile app, you have access to everything.