Do you want to know the truth? They don't really buy house they buy problems. What is a problem? A problem is you are behind on your payments, death, divorce or you have a pending move and don't want two payments and other similar things.
These people buy these problems fast because they know they can get homes for 50-70% of the fair market value just by scaring people. They buy these homes from sellers who think if they don't sell now they will lose everything, but if they sell quickly they can save a Realtors commission.
Now let's look at the reality of the situation. If you were to put your home on the market with a Realtor at 10% below the market value even with a Realtors fee of lets say 7%, you could sell you home in 2 days and still make 13% more than you could selling to a company that promises to buy your home quickly. Imagine $39,000 more on a $300,000 property, just because you didn't panic. Even if you put your home on the market you could have your money in less than 30 days and earn 13% or more than if you sell today to a “WE BUY HOUSES” company.
What is the value to a person who buys these properties at a discounted price? They turn around and put it on the market the next day at full market price and make that $39,000 themselves. Now there are other problems that could arise if you don't talk to a good Realtor. A Realtor will ask you the tough questions. Have you owned the home less than 2 years? Are you going to end up paying a pre-payment penalty if you sell prior to 2 years? A Realtor will give you options and ideas how to sell your home and avoid these penalties and even make more money.
If you feel you need to talk to one of these buyers, ask questions. They will try to pressure you to sign today. Ask if you can talk to your Realtor and / or your Accountant. I will put money down that they will discourage you from doing this. Because they will tell you that this offer is only good for today and today only. Know that if you really investigate the value of your home or get advice from someone like your accountant they will lose the deal. They will try to use scare tactics to get you to sign today, they will pray on your fears of having that 2nd mortgage payment or going into foreclosure. These are concerns, but they are not concerns that should cause you to lose thousands of dollars.
Don't panic is the true lesson to be learned here.
Todd Clark - broker
Kastings & Associates
Phone: (503)524-9494
Fax: (503)622-8739
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Todd, you wrote, "f you feel you need to talk to one of these buyers, ask questions."
I couldn't agree more. In fact, I'll add:
Don't panic. Get detailed information about the deadlines you face. Pay special attention to the date on which you would lose legal ownership of your home.
Never sign away ownership via a quitclaim deed or other means without consulting with an attorney.
Never make your mortgage payments to anyone other than your lender. If you can't pay, never ignore warning letters from your lender.
Beware of any home-sale contract in which you are not formally released from liability for your mortgage loan. Make sure you know the rights you are giving up and that you agree to give them up.
Don't sign anything with blank lines or spaces because information could be added later without your knowledge or consent.
If you do not speak or understand English very well, never rely on the Buyer's translator.