If you’d like to sell your house, there definitely isn’t a shortage of companies that will purchase it from you. This selling option has become more popular for homeowners looking to save money on the sale of their homes or just to be able to find a buyer quickly and move. Selling a house can be a stressful time, which includes getting your house ready to list, interviewing potential agents, learning about selling by owner, and then patiently waiting for an offer to come in.
Most people just don’t have the extra time or money to wait for their home to sell or to cover two mortgage payments. Whether you’d like to find a buyer for your house quickly or prefer not to deal with making any major home improvements before selling, then working with a “we buy houses Minneapolis” company could be for you!
But before you start your search, it would be helpful to know who buys houses for cash, what the pros and cons are, how to spot a scam, what the benefits would be, and the difference between selling to a cash buyer and a realtor. Once you get all those answers, you’ll be able to decide which cash home buyer to work with and feel confident you’re making the right decision selling to a” we buy houses“ company. So let’s get started.
Who Buys Houses for Cash?
As you do your research, you’ll soon discover several “we buy houses” companies out there that claim to pay with cash. But how do you know which ones are legit? To be honest, the barrier to entry is low, anyone can claim to buy houses for cash in Minnesota. You’ve probably actually seen the “we buy houses” signs around town posted on the side of the road with just a phone number, that’s an example of an amateur home buyer. But there are professional home buyers out there who’ve been in business for several years. The house buying companies you want to work with are the ones that have a website, are locally owned, have positive client reviews, and ideally are a BBB accredited business. While you’re searching for a home buyer, these will be the typical companies you’ll come across:
- Local Cash Home Buyers: Usually are smaller companies or even individual real estate investors that purchase homes with cash. Often they buy houses to fix and flip, then resale or keep the property instead and rent it out.
- Investor Networks: These are companies that purchase houses in multiple markets and conduct marketing campaigns on behalf of local franchisees. They also purchase to fix and flip or to redevelop.
- iBuyers: These are companies that are backed by venture capitalists, and they buy and sell houses on the internet. Usually, the homes they purchase are in good condition. To determine property values, they use computer algorithms and might even buy the house sight unseen. iBuyer’s have been known to charge service fees, costing between 5-14% of the sale price. Just for reference, the average agent commission in Minnesota is between 5.4% to 6.2%.
How Do Companies Buy Houses With Cash?
Usually, the home buyer has access to cash from a private investor, is backed by venture capitalists, or has their own personal funds. But since they have this available cash on hand, they are able to avoid traditional financing, which allows them to close quickly. This is one of the many advantages of selling house for cash and working with a “we buy houses” company. But besides that, what are some other pros and cons of selling to a cash home buyer? Those questions and answers will be covered next.
Pros and Cons of Selling Your House for Cash
Selling your house for cash is ideal if you’re looking for a speedy home sale. But you may be surprised to find out that there are other advantages of selling your house for cash besides that. Below are some of the pros and cons of selling your home for cash in Minneapolis.
Pros of Selling Your House for Cash
- Faster Process– We’ve touched on this earlier that “we buy houses for cash” companies can buy homes fast, but how fast? They can close significantly faster than if you were to sell on the open market. For example, Mill City Home Buyers can close within 7-14 days, compared to the average 67 days it takes to sell in Minneapolis on the MLS.
- More Certainty– When working with a “we buy houses for cash” company, the likelihood of your home sale falling through is lower because you won’t need to worry about your buyer failing to qualify for a home loan, changing their mind, or not seeing eye to eye with you over repairs.
- Lower Fees– Most cash house buyers, including Mill City Home Buyers, don’t charge real estate commissions or service fees like iBuyer’s do, also, closing costs are negotiable.
- No Repairs– A lot of the “we buy houses for cash” companies will buy your property “as-is.” Meaning they’ll purchase your house in its current condition, with no repairs needed, renovations, updates, staging, or cleaning required. This would save you the trouble of making any costly and time-consuming repairs before selling your home.
Cons of Selling Your House for Cash
- Lower Price– When you work with a “we buy houses Minneapolis” company, it’s not likely you’ll get full asking price. They will account for repairs and holding costs as a part of their cash offer, but the tradeoff is the convenience of selling quickly and not having to come out of pocket to make repairs.
- Home Buying Scams– Sadly, there are scam artists out there who will claim to buy your house for cash but end up scamming you out of money. So you’ll just have to be careful not to fall into a trap. And the best way to do that would be to learn the warning signs.
Watch Out for House Buying Scams
The best way to avoid house buying scams is to learn how to spot a scam so you can prevent them before they even happen. The wire transfer scam is the most prevalent but usually involves a third-party scammer, not the home buyer.
The house buying scams involving a home buyer you need to watch out for are if they ask for any money upfront. That isn’t how a legitimate home buying company works. Home buyers usually advertise, “we pay cash for houses.” The keyword here is “we pay,” so there shouldn’t be any “you pay” in the transaction process. This should be a big red flag if the home buyer starts asking for money upfront before closing on the property. A reputable Minneapolis home buyer shouldn’t charge you administration fees or processing fees. The money in the transaction should always flow in your (the buyer) direction, not to the seller. This applies even if the home buyer asks for a small amount of money, such as a few hundred dollars, which is still completely unnecessary.
Working with companies that buy houses in Minnesota isn’t always bad, it’s just that the reputable ones won’t charge you any money up front to make you a cash offer. If the cash offer isn’t free or isn’t a no-obligation offer, then you may be dealing with a cash offer scam.
The best thing you can do to avoid a house buying scam is to do your research. Avoid calling only a number on a “we buy houses” sign posted at an intersection. The home buying company you want to work with:
- Has an official website
- Answers the phone professionally
- Answers all your questions
- They put everything in writing
- Has positive reviews
- Is BBB accredited
- And ultimately is one you feel comfortable working with. If they meet all of those requirements and let you pick the closing date, then you’ve found a winner.
Benefits of Selling a House to a Cash Home Buyer
You’ve seen what the pros and cons are to selling a house to a cash home buyer but what are the benefits? Well, for one thing, if you’re faced with a unique selling situation, a cash home buyer can definitely help. You already learned that you’d be able to sell your house as-is and close quickly, not to mention selling a house will save you money on realtor commissions. But are there any other benefits of selling to a cash home buyer that you should know about?
Here are a few other benefits you might like to know:
- If you’re in a situation where you need to unload a house in a hurry- say because you need to move urgently or due to divorce- a cash buyer could help you sell quickly and with greater certainty.
- Working with a cash home buyer could be a benefit if you inherited a property and don’t have an interest in doing work to it or traveling to check on its condition. Instead of letting it sit vacant or worse, allowing it to become condemned, selling to a cash for houses company could be an easy way to turn an unwanted property into cash.
- If you’re in pre-foreclosure and don’t wish to keep your house, selling to a cash buyer may allow you to avoid a devastating hit to your credit score without losing a lot of your equity, as you would with a short sale.
- If your Minneapolis home is in poor condition or has been called an “ugly house,” using a “we buy houses for cash” company could help you sell the place without making major repairs.
Cash Home Buyers vs. Using a Realtor
Now that you’ve learned all about the pros and cons of selling your house for cash, how to spot a house buying scam and the benefits of working with a home buyer- you probably want to know if it’s better to work with cash home buyers or realtors.
Listing with a Realtor
If you were to work with a real estate agent, you’d need to find one you feel comfortable working with and confident that person will get the job done. Usually, hiring a listing agent requires you to sign a listing agreement, giving the realtor 3-6 months to sell your property, which isn’t very reassuring if you need to sell quickly.
The agent may also advise you to make some upgrades to the house or, at the very least repairs, before putting the house on the market. Depending on what work needs to be done, this could take a few days to a few weeks before you can list your home on the MLS.
From there, the agent should advise you on a listing price, handle marketing, show the property, negotiate with prospective buyers, and hopefully find someone to purchase your home. But listing with an agent doesn’t guarantee a fast home sale, no agent can or will guarantee they’ll sell your house within a specific time frame.
The other thing to consider are commissions. Realtors don’t work for free, so if your agent does end up selling your house, you’re looking at paying 5.4% to 6.2% in commissions (split between the buyer and seller’s agents). To put that into perspective, the average sale price in Minneapolis is $325,000, which translates to $17,550 to $20,150 in real estate commission costs. Just a few pros and cons of listing with an agent to keep in mind.
Selling to a Cash Home Buyer
If you were to sell your house to a home buyer, you wouldn’t need to list your property on the MLS or even deal with the obstacles of selling your house during the winter months in Minneapolis when the housing market has slowed down. You can easily sell your house without a realtor and avoid sinking any more money into a home you don’t plan to keep.
That’s the great thing about working with a local home buyer like Mill City Home Buyers, you can sell your house at any time, without making any repairs, staging, or cleaning. And since agents don’t need to be involved, you’ll be saving thousands of dollars by working with a home buyer instead of a real estate agent—all things to consider if you’re hoping to keep some of the profits from your home sale.
Final Thoughts
It’s nice to know you have options when it comes to selling a house in Minneapolis. By selling to a “we buy houses” company, you’ll be able to avoid costly repairs, expensive agent commissions, and months of uncertainty.
If selling to a local home buyer is the route you’d prefer to take, contact Mill City Home Buyers, they’d be happy to explain how it works and more about their company.
Mill City Home Buyers is a family-owned business and is a BBB accredited business. Feel free to give them a call or visit their website for more information and to get a no-obligation cash offer.