We’ve all seen the “We Buy Ugly Houses” billboards or other marketing from cash for houses companies here in the Bay Area. You’ve probably asked yourself two questions: Is this legit? And will I get a fair price? When you work with the right company, the answer to both is Yes.
Are We Buy Houses Companies Legit?
As with any industry, there are scammers and crooks. There are also fair, honest companies in this space that provide a valuable service, it’s up to you as the client to do some research and make sure you know who you’re working with. Here are some things you can do you vet a company you are considering selling to:
Search online: Google search the company name, make sure that a website pops up, they should also have a business result that shows with a physical location.
Rating sites: Is the company registered with the Better Business Bureau, Yelp or other rating company.
Professional organizations: Is the company a member of the local Chamber of Commerce or other professional organization.
Title company: Does the company plan to use a title company to handle the transaction? A title company serves as an independent third party to ensure the sale is handled in an appropriate fashion.
Will I Get a Fair Price from a Bay Area Cash Buyer?
Yes, you will receive a fair offer based on the current condition of your house. To understand this further let’s breakdown how we determine what to offer for a specific house. When we purchase a house, we will be renovating it then selling it to someone who will likely be living in it. The price we can sell the house for is based on what similar sized, remodeled homes are selling for in the area, these are known as comparable sales or comps. Once we look up comps and determine our resale value we simply subtract our costs and profit to arrive at the offer price. It’s a subtraction problem that looks something like this:
Resale Value - Repair costs - Purchase costs - Holding costs -Sales costs - Profit = Offer Price
Often times people will look on websites like Zillow since they provide an estimate of value, this is based on sales of homes in all conditions so it can be very far off if your home needs substantial repairs. If your Bay Area house needs a fair amount of updating it’s not going to be worth as much as the completely remodeled house down the street. These estimates also assume you would be selling your house through an agent meaning you would have to pay agent commission and closing fees, both of which you avoid with a cash buying company.
If you have questions about how a cash buyer arrived at their offer, feel free to ask them, they should be able to provide you with clarification so that you are confident moving forward.
In short, there are several credible Bay Area house buying companies, Proud Startt, LLC being one of them. It’s up to you as the seller to make sure you do a little research so you align yourself with one that will get the job done for you.