The rise of “house flipping” reality shows such as “Flip or Flop” and “Desert Flippers” has led to an increase in house flippers. These shows make the idea of flipping a house seem simple, but in reality, it takes a lot more work. And not just anyone can flip a house. It takes experience and a large budget.
If you want to sell your home for cash, you will likely end up selling it to 3 types of buyers: a Wholesale Buyer, a Lead Generation Company, or a Local Cash Buyer.
So how do you know if the company you’re working with is legitimate? How do you find a cash home buyer that's legitimate? Sam and Matt of New Again Houses® discuss some tips for finding a reputable and local cash home buyer.
Lead generation companies are not going to do construction on your house personally. They instead will take the information you provide them and sell it to a local home buyer in your area. They act as a middle man, and they’re not adding any value to the property. Lead generation companies do a ton of advertising, so it’s likely that you’ve seen some of their advertisements online.
Wholesale buyers are similar to lead generation companies, but they are generally just one person and not a whole company. Their process is similar to that of lead generation companies. First, a wholesale buyer will do a walkthrough of your home and negotiate an offer. Then, they will create a contract. However before the sale of the home goes through they will look for another buyer such as a developer or a mom and pop flipper to buy the home and sell your contract for a profit.
For wholesalers the value of your home lies in the contract. Selling to a wholesale buyer means that they take some of the equity of your home, just like a lead generation company does. That means less money is going in your pocket for your home.
Local cash buyers are buyers that live in your community and are actually planning to renovate your home. They are not selling your information or trying to negotiate a contract to sell. Instead, they are purchasing the home for cash and remodeling it with their team of general contractors to bring value to the home.
Wholesale Buyers and Lead Generation Companies make up a large portion of the house flipping market. That doesn’t mean these options are ones you should take advantage of though. Selling your home to a local cash buyer will always be the best option because more money ends up in your pocket.
Ask the buyer you meet with questions about what they are going to do with the home. If they tell you they are going to remodel it themselves, that’s a good sign.
You should also check out their online information. Reputable local cash buyers try to make the selling process as transparent and easy as possible so they’ll be open about their experience with house flipping.