The housing bubble burst almost one decade ago, but the U.S. economy is still slow to get back on track. The number of distressed properties has dropped dramatically since 2011, but this doesn’t mean homeowners have completely stopped struggling with their mortgages.
Sometimes, there’s just no other solution but to sell your home quickly—and that’s where We Buy Houses Dallas can step in and help you out. Some common scenarios in which you might want to consider this option include:
- You’ve fallen behind with your mortgage payments. Sometimes, life throws a curve ball at you and you incur unexpected expenses. This can happen because of an illness, divorce or separation, or loss of a job.
- You’re faced with having your home foreclosed on by the bank. The alternative of quickly selling your home can stop the foreclosure, while also avoiding irreparable damage to your credit.
- You’re dealing with a house in probate. This happens after the death of a loved one, when you have so much on your hands that real estate conundrums are the last thing you need.
Bottom line: if you’ve accumulated some equity in your home, want to get out of your current mortgage fast, and don’t want to spend any more money upgrading or repairing the home, We Buy Houses might just be the way to go for you. But before you decide, it’s best to have a good grasp of how the program works and what it entails for you as a seller.
The We Buy Houses Dallas process
Selling your home the traditional way has several shortcomings. It takes several weeks, up to 120 or 210 days, in some cases. You need to let a small army of people go through your home, including would-be buyers, folks who just like to visit open houses (with no actual intent to purchase), and, of course, realtors, brokers, and their ilk.
This usually means you will have to invest into repairing and maybe even staging the home. You will need to spend money before you can make money—and finally be relieved of the mortgage you’re looking to get out of. Or you could try selling your home through a We Buy Houses Dallas program.
This is how they work:
- Determining the ARV (After Repair Value) of your home
After you contact a local We Buy Houses Dallas representative in your area, they will pay you a visit, to determine the condition your home is in, the expense that fixing it will entail, and its final value, after fixing it up. In most cases, you won’t get a single price, but a range of amounts, going from the low end to the high end.
- Determining the MAO (Maximum Allowable Offer)
In this next step, the investor tries to figure out the maximal amount of money they would be willing to pay for your home. The offer you eventually get will be for less, so take the following formula as a landmark, not a price you’re likely to get.
MAO = (ARV * 0.65) – Repair Costs
That 0.65 index has been lowered from 0.7 in recent years, following the recession and the downturn of the American economy. Some investors will still use the higher value, though.
Screenshot of a MAO calculator app. Price: $4.99.
Image source: App Annie
- Is such an offer worth it?
Run an estimate of the formula above and plug in your own numbers. Remember that the result you get is not the kind of money you’re likely to pocket after you sell the home, just a maximal value. Would it be worth it? The answer depends on how pressed you are to sell the home.
The truth is that Realtors have a code of ethics, which they are legally bound to uphold. Investors aren’t mandated by any such code, which means some of them might be less than ethical. But it’s just as true that Realtors these days can’t promise you they’ll close on the deal in two weeks’ time, or even serve you a ratified contract. Meanwhile, investors and wholesalers can do just this, because they have the money to buy your home as-is and they always factor in the repairs.
Bear in mind that there’s a difference between the following approaches to quick home sales:
- We Buy Houses: works best when the owner has some equity and wants to recover whatever she can of it, as soon as possible;
- Lease-option: works when you have equity, but don’t need the cash right away, but several years down the line, when the option is exercised;
- Subject–to: works when you have little equity and just want out.
How to spot a home buying scam
So, you’re trying to sell your property quickly. It’s commonsensical, but it bears repeating: you have to do your homework before handing your home over to anyone. While many fast home buyers are legitimate, scammers and schemers do exist. In order to keep you safe from them, here’s a checklist of red flags to help you spot them:
No BBB accreditation
BBB stands for ‘Better Business Bureau’ and getting accredited with it is mandatory for any honest business. To check if the home buyers you are considering working with are registered, simply visit the BBB website for Dallas and Northeast Texas. The website offers plenty of resources for both businesses and consumers, including a Scam Tracker, where you can report any potential fraud.
Image source: BBB Dallas
Little or no initial contact with an actual person
While it’s obvious to everyone that we live in the digital age of the web 3.0, it’s important to work with a real-live person before you even consider signing over your title deed, or providing any sort of sensitive information.
No investor, i.e. no money
Perhaps the biggest problem that can arise when trying to sell your home quickly is realizing the buyer doesn’t actually have any investors lined up.
The investor shouldn’t have to get a loan (which would force them to wait around until the money is approved by the bank). At the very least, they should be pre-approved and, ideally, they should have earnest money upfront. Otherwise, you risk seeing the deal fall out of escrow even after you’ve been assured it will go through, simply because your buyer doesn’t manage to secure an investor.
Sell your home today – and do it the easy way!
SellMyHouseDallas.com can help you sell your home as fast as you need it sold. It can be the one opportunity you get for recovering whatever equity you have on your home. Not only have we been on the market for enough time to know all about the way it works, but we can also promise you a hassle-free selling process.
Try it out! Fill in our online contact form and we’ll have a SellMyHouseDallas.com representative contact you right away. We’ll also throw in a free report on how to sell your home quickly and effortlessly in North Texas – all in just 7 days!