Stop Assuming Home Buyout Programs Are Bogus

The home buyout industry has a bad reputation, and it’s no wonder why. Drive around any town, and you’ll come across cheap signs posted at intersections or nailed to trees that read, “Cash for homes fast!” The person behind these efforts probably went to a real estate seminar where he or she was told to find destitute homebuyers without a nickel left to cover their mortgages.

These “investors” just want to buy the cheapest home possible so they can turn around and sell it for far more, and the homeowners who sold to them were most likely getting shellacked on the price. Instead of offering 50 cents on the dollar like they used to, today’s home buyout programs purchase your home at close to its fair-market price.

Modern-day home buyout programs are also looking for a wide range of homes. For example, $50,000 homes that look like they were built centuries ago are no longer top contenders. Institutional money in buyout programs now allows expensive homes in nice neighborhoods to be potential buyout candidates.

The Changing Landscape

Multimillion-dollar companies entering the buyout space are bringing professionalism to an industry that used to be anything but. My company, Marketplace Homes, in addition to others, such as Opendoor and OfferPad, are interested in great-looking homes in solid condition instead of the cheapest ones on the block. We’re also looking for individuals who bought a home at a reasonable price and have some equity — they’re typically professionals who might be working and don’t have the time or energy to do endless house showings.

Home buyout programs also cater to “move-up” buyers. If you have four kids and two dogs in a 1,200-square-foot ranch house, you might be itching to get some more space. However, putting your home on the market for an uncertain amount of time and cleaning it constantly before showings is a huge pain. Fortunately, a home buyout program can get rid of all the hassle.

A risk-averse “move-down” buyer is also an ideal candidate for a home buyout program. They’re often purchasing in an active 55-and-up community, and they might even have their home already paid off. Still, if you’re making a move or perhaps building a home down in a warmer part of the country, it’s nice to know that your original home is sold and you can move whenever you want. For a retiree who’s on a fixed income, this is a pretty appealing option.

4 Home Buyout Program Benefits to Consider

Home buyout programs are no longer the “last resort” option they used to be. If you’re thinking about giving them a try — or you’re still on the fence — here are four benefits you could reap from finding the program that’s the right fit:

1. More money in your pocket
I’m not delusional here — I know that at the end of the day, it’s always about price, so you might as well find out what you can get. Instead of calling a real estate agent to come and tell you what he thinks he can get for your home, why not call a buyout program and get an actual offer? If you don’t like what you hear, you don’t have to take it. Simple as that.

On the other hand, you might like the asking price, and sometimes we actually give too much. It’s a part of the business, and I’ve done it. We’re making a huge number of offers and calculating them based on tons of automatic valuations. Occasionally, the end result is me offering $220,000 for a $200,000 home, and no doubt it’s a great feeling for the seller to walk away with an extra $20,000.

2. Capitalize on time
Our fee structure is fair market value minus 10 percent. Sound high? A traditional real estate agent charges around 6 percent, plus you’ll pay a few percent in closing costs and transaction fees. Essentially, a home buyout program ends up costing the same commission that you net with a real estate agent.

What it doesn’t cost is the time, stress, and energy that comes with putting your home on the market. This means you can go and look for homes knowing that you have an offer on your own secured already. That convenience and peace of mind is a huge advantage, and it comes at about the same price as a real estate agent.

3. Flexibility to figure out what’s next
The great thing about getting an offer from a home buyout program is that it really puts the ball in your court. You can take your time and find the home you love — or even take the opportunity to build it.

I have homes right now that have sold into the spring of 2019. Don’t worry, we’ll wait. Knowing you’ve secured an offer gives you the freedom and flexibility that has rarely been associated with the real estate industry, let alone buyout programs.

4. Options in case you change your mind
Don’t like your offer? Calling a home buyout program to get a number requires no commitment on your end. If you’d rather list and try to get a few dollars more for your home, we’ll tear up our buyer agreement.

Most people who go this route usually find that the benefits of listing aren’t enough to outweigh the hassle of the process. For potential home buyout program candidates, the earlier they accept an offer, the more of their own time and money they save. You honestly have nothing to lose, so explore your options to the fullest.

Buyout programs these days are far from bogus. The recent influx of institutional money has helped these programs stray away from undesirable homes that couldn’t sell otherwise. In addition, the level of technology now being utilized means we can pull comparables on any home in the country and provide an offer in a timely manner. Using an agent and listing your home can turn into weeks or even months of uncertainty, so why wait? A buyout program might be the best decision you make in your home-selling process.