I wish there was free money available.  Really, I do. Did you ever wonder how those we-pay-cash-for-houses companies work?  Here it is.  Pro-Publica did an investigation on one of the most well known of these companies, We Buy Ugly Houses (the company name is actually HomeVestors), and have reported on it (link at the bottom of the page).

The farce of selling your home with no repairs, no commissions, no lenders, no inspections has costs - there's nothing for free here.  These cash buyers are in it to make some good money - and you're who they are going to make it off of. 

You sell at a discount and they either assign the contract to someone else (who may close, maybe not) or they do a bit of work (or not) and flip it.  Flipping is fine, but they won't be making money off the buyer - if it is overpriced, the buyer simply buys something else.  The only thing that makes this equation work is if they are able to buy the home far below value - which means they are making their cash off of the seller.  There are dozens of these companies, as there is good money to be made with this idea.

On the other hand, if you absolutely have to get out of town, and you can afford to do it - they are known for being pretty hassle free and fast.  That said, unless I was absolutely desperate and had no other way of hightailing it out of town, I would opt for the traditional sales route. 

There are plenty of reputable flippers that you can sell your home to if you need fast cash.  Again - they are in it to make money.  They can't sell the home for over value (the appraisal, and thus the loan will fail), so all they can do is buy it low.  There are reputable flippers who are not aggressive and are, in fact, fair.  They buy low, add in carrying costs, sales costs, fix-it-up costs, a profit margin and they're done.  Your agent can help you figure out what is a reasonable sales price based on estimated costs of the work needed, the carrying costs, sales costs, and a reasonable profit for the flipper.

Here's the article from Pro-Publica:

It’s a good day at ProPublica when one of our investigations sparks real-world impact. And lately, there have been a lot of good days surrounding our investigation into HomeVestors of America, the self-described largest home buyer in the country. You may better know HomeVestors as the “We Buy Ugly Houses” company — the one with billboards that look like this:

A short video about HomeVestors.

Click the image to see a video about the story or read more HERE.

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