There are a lot of companies that claim to buy your home for cash, but not all these companies operate the same way and with the same level of integrity. Here are some of the different types of cash home buyers that you may come across and how to determine which type of cash buyer they are.
- The “Let Me Try to Wholesale” Guy
To comprehend this type of cash home buyer, it’s essential to grasp the disparity between a Flipper and a Wholesaler. A Flipper, as portrayed on HGTV, purchases your home and renovates it. Conversely, a Wholesaler enters a contract with the seller at a specific price and then endeavors to find a flipper or landlord to buy the property for more, profiting from the difference
While wholesaling isn’t inherently problematic, the issue arises when wholesalers mislead sellers into believing they’re genuine cash home buyers. They may lack the funds or intent to purchase the property outright, potentially leaving sellers in limbo if they fail to secure a buyer willing to pay more than their contract price
Signs of a wholesaler include:
- Requesting a refundable deposit.
- Offering higher prices without genuine purchasing intent.
- Inability to provide documentation of recent property purchases and renovations.
Lack of proof of funds; genuine bank statements should be requested for verification.
- The Highest Offer “Bait & Switch” Buyer
These buyers often present the most lucrative offers initially. However, as the closing date approaches, they may renegotiate due to purported unforeseen repairs or issues, coercing sellers into accepting a lower price. This tactic capitalizes on sellers’ time constraints and limited alternatives after rejecting other offers.
While certain legitimate issues may arise during the process, renegotiating solely to drive the price down is unethical.
Indicators of a bait & switch buyer include:
- Initially exceptionally high offers compared to others.
- An inspection contingency allowing price renegotiation post-inspection.
- The “Real Deal” Cash Home Buyer
The “real deal” buyer is a seasoned investor with a proven track record of success. Their offers may not be the highest, but they prioritize honoring agreements and delivering on promises, offering stability and reliability to sellers.
Identifying a “Real Deal” cash home buyer involves:
- Providing genuine proof of funds.
- Demonstrating a history of successful property transactions.
- Possessing authentic positive reviews and testimonials.
- Willingness to offer seller and professional references.
Many sellers opt for cash home buyers seeking a quick and seamless sale. However, the prevalence of dubious practices by buyers #1 and #2 underscores the importance of due diligence.
In conclusion, discerning the authenticity and reliability of cash home buyers is crucial for a smooth transaction. Research, verification, and scrutiny are essential steps in identifying reputable buyers in an industry where integrity is paramount.