How do 'we buy houses' companies work?
The signs are everywhere. Here's the business model behind them, in plain terms, so you know what you're dealing with.
No obligation. No pressure. Takes about 2 minutes.
The short answer
'We buy houses' companies are investors who make cash offers, usually on houses that need work or for sellers who need speed. They generally make money one of two ways: they buy below what the house would be worth fixed up, repair it and resell or rent it, or they sign a contract with you and assign it to another investor for a fee. Knowing which kind you're talking to tells you who will actually close.
Step by step
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1
Why the offer is below market
The buyer takes on repairs, holding costs, resale costs and a profit, and those come out of the price. Our guide on how cash offers are calculated walks through the math.
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2
Buy, fix and resell or rent
Some companies close on the house themselves, renovate it, then sell it or keep it as a rental. You deal with the same buyer from offer to closing.
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3
Sign and assign
Others sign a contract with you and pass it to another buyer for a fee. Virginia and Maryland have specific rules on this, which our wholesaling guide explains.
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4
How to check one out
Ask whether they'll close themselves, ask for proof of funds and the title company's name, and look up the company in your state's business records. Our scams guide lists the red flags.
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5
Compare against listing
A cash offer is one option. Put it next to what listing could net after repairs, commissions and time before you decide.
Cash offer vs listing
Example: a $250,000 home
| Offer | $205,000 |
|---|---|
| Repairs | $0 |
| Commissions | $0 |
| Closing costs | $0 |
| You walk away with | $205,000 |
| In 7 to 14 days | |
| Sale price | $250,000 |
|---|---|
| Repairs | about $8,000 |
| Commissions | about $13,800 |
| Closing and holding | about $6,000 |
| You walk away with | about $222,200 |
| In 60 to 90 days | |
Example only. Your numbers depend on your home and market.
We show the cash offer next to what listing could net, so you can see the trade-off instead of taking anyone's word for it.
Frequently asked questions
Are 'we buy houses' companies legit?
Some are established businesses and some aren't. Check the company's registration, ask for proof of funds, and make sure a title company or closing attorney handles the closing.
Why do they buy houses that need work?
Because repairs are where they can add value. A house that's hard to sell to a buyer with a loan can be a good fit for a cash buyer who plans to renovate.
Do they charge fees?
Ask before you sign. A company buying your home shouldn't charge you upfront fees. We charge no fees or commissions on a cash sale.
Who are you?
We are real estate investors based in Baltimore, helping homeowners since 2016. We buy houses directly for cash. We are not a licensed real estate brokerage and do not list homes ourselves; if listing could get you more, we show you the math so you can choose.