Home buying companies always promise a fair cash offer for your home. But what does that really mean? It almost seems too good to be true that you can sell your home in a matter of days, without the hassle of a conventional sale, at a fair price. And yet, it really is true. This is because the value and savings of selling your home to a cash home buying company more than compensate for the reduction in the sale price. Here’s how the offer price is calculated:
If you were to sell your home the conventional way, you would hire a realtor and they would do market research to determine their recommended asking price. This is largely done by performing comps. What does that mean? It means that they look at homes in your area that are similar to yours which have sold recently. They assess the asking price, sale price, and days on the market along with the location, square footage, age of the home, and amenities. Using that information, they then approximate the market value. Home buying companies do the exact same thing.
In a conventional sale, your buyers will expect you to either take care of any necessary repairs and updates yourself or reduce the price of the home to compensate for them. When you sell your home to a home buying company, no repairs, remodels, or updates are required. Instead, the home buying company assesses the extent of the work to be done and estimates how much everything will cost.
Once the home buying company has the basic market value of the home as well as the estimated cost of repairs and remodels, they can use that information to calculate their offer price. The home buying company simply subtracts the estimated repair, remodeling, cleaning, and updating costs from the market value. All that is left to do is make their offer. It is totally up to you to decide whether to accept or reject that offer.
Selling your home to a home buying company is a win-win for both parties. The home buying company gets a great property at a reduced price and you get to avoid all of the hassle, expense, and waiting of a conventional sale. Seems like a no-brainer, right?
Looking to sell your home in the Birmingham area and want to avoid the hassle and expense of a conventional sale? Click here to get started with BuyBHM!