If the time for selling a house has come, then you’re probably asking yourself a lot of questions. How can you find the best cash home buyers in Minneapolis? What are the pros of using cash home buyers in the first place and is it worth it? What options do you have when selling a house to a home buying company? What are the different types of home buying companies and which home buying company is the best?
And these are just a few. You may also be wondering about what is a home investor and whether it’s a good idea to work with one. To help you make the right decisions and have peace of mind knowing that you’re well-prepared, we’ll help by answering all of these questions and more. We’ll answer the question of what is a cash home buyer, we’ll look at what selling a house to a home buying company means, and give you a better understanding of the MN real estate market.
Both home sellers and home buyers could benefit from the information we’re about to share. So without further ado, let’s get started.
Different Types of Home Buying Companies
When selling your house in Minnesota, one of your options is to find an individual who is interested in purchasing your property. But this is not the only option you have. You can also work with home buying companies in MN. A home buying company is one that specializes in purchasing homes for a profit. That’s their actual business model. There are a lot of reasons why home sellers prefer to work with home buying companies. For instance, the sale process is usually a lot quicker, oftentimes there is no need for financial back-ups like a mortgage or loan, and others as they usually pay using cash.
But choosing a home buying company in MN is not that simple. First, you’ll need to be aware of the different types of home buying companies. Once you’re familiar with the distinctions between all of them, you could look into the top home buying companies in your area to ensure you’re working with a reliable professional.
Let’s start by exploring the different types of home buying companies.
House Flippers
House flippers are house buyers who buy properties with the aim of repairing and renovating them in order to increase their value, allowing them to resell for a profit afterwards. House flippers carefully analyze whether a cosmetic improvement or mechanical repair would be able to quickly increase the price of the property before they make the decision to invest. This type of buying company is usually ideal for someone looking to sell their house as-is, without having to repair and restore its perfect condition before selling.
iBuyers
iBuyers are able to make an instant offer on a house based on the real estate market data that they have access to. Normally, they won’t insist on even viewing the property before having a conversation about a potential sale. As opposed to house flippers, they’re usually not very interested in properties that require renovation and repair work but would rather focus on houses that are in good condition.
Making a deal with an iBuyer usually involves a fee of between 6% and 7% that the house seller is charged. The fee is applied for handling the purchase, marketing, and sale of the property. If the offer is accepted, the iBuyer will ask for a property inspection that is normally conducted by their representative.
Buy-and-hold Companies
As the name suggests, buy-and-hold companies invest in properties that they rent to tenants afterwards for a profit. The model is similar to that of house flippers only the difference is the end goal. Buy-and-hold companies are also open to investing in properties in need of a slight upgrade as they are usually lower priced but with massive potential for added value.
Most buy-and-hold companies are rather small and it’s important to do your research and make sure that you’re partnering with a legitimate and reliable professional if you’ve received an offer for your house.
If you’re looking for the best home buying company in MN, it would make sense to look at the options of working with cash home buyers. We’ll explain why later on in this article.
What is a Home Investor?
One of the first questions to answer is what is a home investor. Selling your house to a home investor can save you a lot of time and stress and is a common road to take in case of personal situations like a job relocation, divorce, or risk of foreclosure. But why? How is selling to a home investor different from the standard sales process?
Home investors can be either an individual or a professional company that specializes in purchasing properties. While individual investors could sometimes only have a portfolio of one or two properties that they’ve invested in, investment companies could have huge portfolios with hundreds or even thousands of properties. Home buyer investors normally work alongside one of four investment strategies:
- Buy-and-hold: As we mentioned above, the buy-and-hold investment strategy involves the investor holding the property in order to rent it out to tenants or perhaps hold it for the purpose of growing their portfolio.
- Wholesale: This strategy involves the quick resale of purchased property. The property is bought at a very low price and resold, usually to another investor, for a larger price.
- House-flipping: In short, the investor purchases properties in need of repair work, renovates or improves them and resells for a higher price.
- Buy/flip/hold: This hybrid strategy involves the purchase of a property, its renovation, and then renting out to tenants, while the investor is still holding ownership over it.
What is a Cash Home Buyer
When selling a house, selling to a cash home buyer is perhaps one of the most advantageous roads to take as a home seller. But what is a cash buyer in the first place?
Cash home buyers are individuals with enough financial stability that they are able to pay for a property in cash upfront. Selling to a cash home buyer in MN means that the buyer doesn’t have to rely on a mortgage or another type of financial loan to fund the purchase. If you’ve received a fair cash deal from someone interested in your property, it’s hard to say no. A cash home offer usually means that the sale process will be a lot easier and straightforward, you will save time, and there will be almost no risk of the deal failing for reasons like unapproved mortgages or others.
Cash home buyers in Minneapolis are not something rare and it’s only a matter of being informed to find the right cash buyer.
How Can You Find the Best Cash Home Buyers in Minneapolis
So who are the best cash home buyers in MN? If you want to find the best cash home buyers in MN, there are a few steps you can take. Minneapolis cash home buyers could be discovered by:
- Using listing platforms like Craigslist to attract cash home buyers
- Attending real estate auctions where you could meet cash home buyers MN
- Placing a noticeable sale sign on your property
- Subscribing to your area’s local tax assessor website
- Finding cash home buyers in MN directly via friends or relatives
Pros of Using Cash Home Buyers
Cash home buyers in MN are a popular choice for most home sellers. But why? What are the pros of using cash home buyers as opposed to selling to standard buyers who will rely on a mortgage to afford the property?
There are a number of benefits of using cash home buyers and we’ll look at them in more detail.
A Quick Sales Process
One of the main differences between cash and traditional sales is the time taken for completion, from the first step to the last. Traditional sales are often slow and rigid due to the mortgage lending process that the buyer often relies on. In most cases, the mortgage will have to be underwritten, meaning that you need to prepare for a period between 30 and 60 days for waiting. During this time, the buyer could change their mind and by the time they’re approved, they may have chosen a different property to invest in.
A cash offer doesn’t involve any mortgage lending and therefore a cash home sale is considered significantly faster.
Cost Savings
Cash home buyers are usually prepared to invest in properties that are not in great condition. Regardless of whether your home is in need of full remodelling or minor cosmetic repairs, you could sell it as-is by working with a cash buyer. But apart from saving money on repairs, you’ll also save from closing costs like document fees, appraisal fees, processing fees, credit checks, loan origination fees, and more. The sale process will be less expensive both for the buyer and seller, which is a win-win situation.
No Appraisals
In order for a mortgage lender to lower the financial risk, they often need to confirm that the property they’ll be financing has at least the same value as that of the loan or higher. To do this, an appraisal is necessary to give a full picture of the property’s value. After receiving the appraisal information, lenders could also withdraw from the financing and reject the buyer’s mortgage loan.
By sell your house without a realtor to a cash buyer, there are no appraisals involved.
No Risk
A cash home deal doesn’t involve as much risk as a traditional sale that could fail at any point in time due to a wide array of reasons that are out of your control. If a cash buyer is interested in purchasing your property, it’s almost a certain yes. You don’t have to worry about the buyer finding a different property while they wait for their mortgage approval. If you’re in an urgent situation, a cash deal also means that you receive the money faster and you get rid of a house that is putting weight on your shoulders.
Regardless of the advantages of using cash home buyers, there are still a few misconceptions about cash home buyers. For instance, a lot of people forget that cash home buyers will usually make an offer that is slightly or significantly lower than what you could sell your property for if working with someone else. Cash home buyers will usually look for sellers in specific situations like divorce, bankruptcy, foreclosure, job relocations, evicting tenants, vacant homes, or damaged homes. This allows them to offer a quick and easy solution for the home seller but it also allows them to bargain for a lower price.
Pros of Using Realtors
Selling your property in Minnesota also raises questions about working with real estate agents. There are a lot of mixed opinions as to whether realtors in MN are a must if you’re looking to sell a house. There are certainly a number of benefits of using realtors that could help make the process quicker, easier, and fully legitimate.
Here are some of the main advantages of using realtors when selling your home:
- You receive access to professional pricing expertise
- You don’t have to rely on your own knowledge for contracts
- You receive reliable information on what type of properties sell in your area along with their prices
- You can enjoy the benefits of the multiple listing service
- You have more authority when negotiating with buyers
- You will always be on the right side of the law
- All paperwork will be taken care of by your realtor
The pros of using realtors are hard to ignore and most people prefer to rely on their know-how and expertise.
Conclusion
We hope that the information we’ve provided on how to find the best home buying company in MN will help you make a perfect choice when you decide to sell your home. If you’re interested in learning more about the topic, we invite you to visit our case study on home buying companies.