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I am noticing tv advertisements for a couple of companies that apparently price and buy your house outright within a certain time, no showing, etc.
My guess is their business model is a good inspection and lowest price (for their own benefit) and a quick sale (for the owners' benefit).
How is this any different from the real estate business model (that I have experienced) to price at the lowest quickest to sell price? and at the end of the listing it suddenly sells, usually to a fellow realtor. Is it reputable? recommended?
Just wondering because I am thinking selling within a year and if the $ come out roughly the same (as is all that would be acceptable to me) why not just ditch the traditional business model?
FWIW I live near Orlando FL in an established neighborhood surrounded by top schools and conveniences. Town is growing, we even have a hospital now. if that factors in I don't know.
I checked into it a few years back when I was anxious to sell my home quickly. The offers I received were ridiculously low - about half of what I got when I finally sold my home at a profit.
I think these companies are taking advantage of people who want to get rid of their home quickly and don't care about taking a loss.
I am noticing tv advertisements for a couple of companies that apparently price and buy your house outright within a certain time, no showing, etc.
My guess is their business model is a good inspection and lowest price (for their own benefit) and a quick sale (for the owners' benefit).
How is this any different from the real estate business model (that I have experienced) to price at the lowest quickest to sell price? and at the end of the listing it suddenly sells, usually to a fellow realtor. Is it reputable? recommended?
Just wondering because I am thinking selling within a year and if the $ come out roughly the same (as is all that would be acceptable to me) why not just ditch the traditional business model?
FWIW I live near Orlando FL in an established neighborhood surrounded by top schools and conveniences. Town is growing, we even have a hospital now. if that factors in I don't know.
These things are not for everyone (obviously) but their upsides are:
-no hiring an agent (save, say 5-6%, for example) which bridges some of the gap
-no/less waiting - quicker sale (reduced holding costs - mortgage, taxes, insurance, lawn mowing, etc) can bridge some of the gap too
-if home is vacant and for sale for a protracted time, risk of vandals, pipes burst, furnace dies, liability, etc, etc.
-no periods of unknown with inspection, buyers that can flake out, etc.
-no (or likely much less) liability issues around disclosure, etc.
-quicker cash in pocket can enable seller to take advantage of other opportunities - good deal on another house, invest in business, stocks, etc. or avoid costs related to default on loans, tax obligations, clear up legal problems, etc.
Clearly you pay dearly for these things but as long as you know what this convenience is costing you, it's good for some to have the option of a quick and convenient sale.
I am noticing tv advertisements for a couple of companies that apparently price and buy your house outright within a certain time, no showing, etc.
My guess is their business model is a good inspection and lowest price (for their own benefit) and a quick sale (for the owners' benefit).
How is this any different from the real estate business model (that I have experienced) to price at the lowest quickest to sell price? and at the end of the listing it suddenly sells, usually to a fellow realtor. Is it reputable? recommended?
Just wondering because I am thinking selling within a year and if the $ come out roughly the same (as is all that would be acceptable to me) why not just ditch the traditional business model?
FWIW I live near Orlando FL in an established neighborhood surrounded by top schools and conveniences. Town is growing, we even have a hospital now. if that factors in I don't know.
It's free to get an estimate and compare.
The product you are buying from these business models is "convenience."
You have to recognize that there is a price on convenience.
Just last week I received a written offer from a similar type of company. They offered to buy some recreational land that I own in northern Michigan. They touted the "convenience" of a quick sale and generously offered to relieve me of paying property taxes on the land. Their offer? Fifteen cents on the dollar. Uh...no thanks.
I am noticing tv advertisements for a couple of companies that apparently price and buy your house outright within a certain time, no showing, etc.
My guess is their business model is a good inspection and lowest price (for their own benefit) and a quick sale (for the owners' benefit).
How is this any different from the real estate business model (that I have experienced) to price at the lowest quickest to sell price? and at the end of the listing it suddenly sells, usually to a fellow realtor. Is it reputable? recommended?
Just wondering because I am thinking selling within a year and if the $ come out roughly the same (as is all that would be acceptable to me) why not just ditch the traditional business model?
FWIW I live near Orlando FL in an established neighborhood surrounded by top schools and conveniences. Town is growing, we even have a hospital now. if that factors in I don't know.
Hey there theoldnorthstate,
This is an interesting topic that you brought up because our team just had a meeting about all these internet companies popping up to "sell your home fast" or whatever slogan they are using nowadays.
The bottom line from what we figured out, which may or may not be true depending on the company, is that they find desperate home owners who need to sell quickly by making it enticing with these "1% commissions and the rest is back to you" wording. They promise you that they can sell your home in X amount of time and when they don't, they offer the home owner a price, usually low ball number, to purchase the home then they resell it later.
My broker, from his research, was telling me that these companies typically do the bare minimum work such as putting some pictures online that don't do all they great and just making a simple ad online which doesn't draw much interest. You might hear lingo such as "the market is so hot that it will sell itself" and that can't be anymore further away from the truth. Most GOOD Realtors can tell you there are definitely MULTIPLE ways to market your home to get the most exposure to drive traffic to your home and thus bringing you more money at the end of the day which is the WIN.
At the end of the day, like what most people say, when it's too good to be true, it probably is. So I caution you to really do research and read between the fine lines on these companies or just reach out to a licensed Realtor to get the real scoop.
There's a couple of different models.
One is local investors. Some will tell you straight up before they come out they're looking to pay 50-65% of the retail value and if you are not willing to take that, they don't need to come out. Price is low, but they close fast maybe 7-10 days...no fuss, no picking apart your house, no appraisal, no inspection, etc. DONE.
Another option is the national companies....they're going to offer more. Maybe 80-85% of the value. They do an inspection typically and either deduct the repair items, or make you do them. They're probably pickier on that than a normal retail buyer. They won't give you a retail price as they still have to make money. They do have certain geographical restrictions and certain price ranges they want to be in. I would say this is not a program for most people, but it is for some. If you need for example a definite closing date, so for example you can go buy a new home on a specific date. That might work, but you pay for the convenience. Probably similar to trading in your car at a deal when you buy a new one. So the dealer never gives you what you think your car is worth, but it's convenient....
Just like car dealer prices, you can make a lot more money if you sell the house retail with a realtor, but you do put up with some inconvenience and uncertainty. Closings can be delayed, inspections, repairs, appraisals can be an issue, but you might make 10-15% more money. You just have to decide what works best for you. Financially probably this is the better option, but less convenient in many circumstances.
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