Selling your home can be a tricky business, especially for a first-time seller. There will be myriad things to do like repairing your home, preparing it for open houses, taking attractive photographs and of course, listing it properly on the local MLS or Flat fee MLS databases. As a seller, you might be under a lot of additional stress as well if you have personal constraints that require you to sell your home fast with the least amount of hassle. This is where ‘We Buy Ugly Houses’ come in.
What is ‘We Buy Ugly Houses?
We Buy Ugly Houses is a legitimate cash buyer of undervalued properties in subpar condition, or in other words, ugly houses. They operate under the parent company HomeVectors which licenses the name out to local franchisees. Each We Buy Ugly Houses franchisee has been trained under the parent company; however, each operates independently and without the direct guidance and supervision of the parent company. We Buy Ugly Houses has franchise offices in 45 states as well as Washington D.C. with multiple locations in most counties and cities.
How Do We Buy Ugly Houses Work?
Several We Buy Ugly Houses reviews talk about their smooth and hassle-free way of doing business. Here is a quick break-down of their process:
- Contacting the local franchise: submit information about your home at the local We Buy Ugly Houses franchise, either online or over the phone. You will need to provide all basic information regarding your property including its location, age, square footage, and of course, its condition.
- Scheduling an inspection: once the basic information has been submitted, you can expect agents from the franchise to contact you to schedule an inspection of your home, often within 24 hours. After the inspection, the company will make a non-negotiable cash offer — in other words, take it or leave it.
- Signing the purchase agreement: if you agree to the cash offer, you will sign a purchase agreement and choose a closing date. This will be a lot more flexible than one negotiated with traditional buyers since there is no financing involved.
- Finalizing the deal: you can expect to finalize the deal and get paid in as little as 2 to 5 weeks.
How much do We Buy Ugly Houses offer?
While there is no hard-and-fast rule regarding the maximum price that We Buy Ugly Houses can offer, it seems that the company generally tends to follow the 70% rule that is well-known among house flipping companies. What this means is that, for the buyer to turn a profit on the property, they should pay no more than 70% of the houses After Repair Value or ARV minus the cost of the total repairs.
As sellers, you should keep in mind that this is the theoretical maximum that We Buy Ugly Houses will offer. Usually, they persuade you to accept 60% or even 50% of the ARV. If you are short on cash or cannot afford to repair your home before selling it, or if the drawbacks of your property are due to factors beyond your control (like its location), then a deal with We Buy Ugly Houses might be just what you need.
Why should you opt for We Buy Ugly Houses?
The greatest advantage in selling to We Buy Ugly Houses, as their reviews show, is that you will be able to sell your home quickly and smoothly, irrespective of the condition it is in. The business model of We Buy Ugly Houses is very simple: identify financially distressed sellers with undervalued properties and offer a quick cash payment below market prices. That being said, an association with the company is recommended for those sellers who are under extreme pressure to close a deal quickly (either because of an impending move or because they inherited the property after the death of a family member). Those sellers who cannot afford to repair and renovate their houses before putting them on the market will also find We Buy Ugly Houses the best option to get ready cash in hand quickly.
Are there any hidden pitfalls?
- We Buy Ugly Houses has received a 2.5 rating out of 5, from 65 reviews.
- The most frequent complaint regarding We Buy Ugly Houses is that they offer very low prices. Several reviews have also spoken out against company representatives using high-pressure tactics to persuade owners to sell at low prices, after understating the property’s actual market value.
- Another important point to keep in mind is that several We Buy Ugly Houses franchisees are independent contractors. While the company itself is legit, several people have come forward claiming to have been ripped off by persons pretending to be from We Buy Ugly Houses. This is why, before choosing a franchise, you must thoroughly investigate its legitimacy. One easy way to determine this is to ensure that the cash flow occurs only in one direction — towards you, the seller. If the company representatives demand any ‘processing fee’, you can be certain that they are not legitimate.
- Yet another pitfall to watch out for is wholesaling. After accepting the cash offer and signing a purchase agreement, the company representative might stall while trying to flip the contract to another investor at a profit. While this is a legitimate way to do business, it also means that you will be in for a frustrating wait as the agent tries to flip your contract to the highest bidder. One way to avoid this hassle is to include a clause in the agreement restraining the company or its representatives from reassigning the contract.
In short, We Buy Ugly Houses is your best option if you want to finalize a sale quickly and are not bothered about making a large profit from the sale. However, the possibility of fraudulent offers and scammers is also thick on the ground, so make sure you do a thorough check before shaking hands on the deal with the franchise. As a seller, you can also investigate other options like For Sale By Owner Websites, flat fee MLS listing, and employing a full-service real estate agent to carry out the sale.
