Home sellers typically hire a real estate agent to help them find a buyer. In fact, 89% of home sellers worked with a real estate agent in 2020.
But this approach may not work for you. If your home is in very poor condition, an agent might struggle to find a buyer who’s willing to take on a costly fixer upper. Or, if you’re on a tight timeline because of financial problems or other issues, you might not be able to wait the 55-70 days on average it takes for an agent to help you sell on the open market.
In these situations, selling without an agent to a company that buys houses for cash may be a good solution. In general, your options fall into two categories:
|Solution||How it works|
|Cash Buyer Companies||Also known as "We Buy Houses" companies, cash buyer companies typically purchase distressed properties at discounted prices|
|iBuyers||These companies purchase homes that need minimal repairs, and they pay close to fair market value|
Additionally, local real estate investors can typically purchase homes on a much faster timeline than the average buyer who needs conventional financing. These specialized buyers typically make cash offers — if you’re willing to part with your property at a bargain price.
Whether you’re selling your residence or looking to unload an inherited property, it’s always worthwhile to compare your options before jumping into a sale.
If you’re not sure of your property’s worth, our friends at Clever can help you get started by connecting you with a top agent who can provide a free, professional home valuation.
- Cash buyer companies and iBuyers offer speed and flexible closing dates, but pay less than fair market value (FMV).
- iBuyers pay closer to FMV, while cash buyer companies sometimes pay as little as 50% of your home’s worth.
- Local real estate investors also often make cash offers on houses, but they typically want to pay bargain prices. Be prepared to research investors’ credentials and negotiate for your best interests before closing the deal.
- You’ll almost always get the best possible price by listing your home on the open market with a real estate agent, but the process takes several months in most markets.
Pros and Cons of Selling to a Cash Buyer Company
- Companies that buy houses for cash can close quickly, sometimes in as little as 7-10 days — or they can be flexible about scheduling a later closing, depending on your timeline.
- You won’t have to worry about sale contingencies from the buyer in most cases, avoiding pitfalls that can hurt deals that rely on bank financing.
- You’ll likely walk away with less money than you’d earn by listing on the open market. In some cases, you’ll get just 50% of your home’s fair market value.
- No one is representing your best interests so you’ll need to advocate for yourself.
- Most companies allow little room for negotiation on their offers
Options for Home Sellers
The best home selling solution will depend on your priorities and goals:
|Your property is vacant or in rough shape||A cash offer from a "We Buy Houses" company|
|You want a fast, predictable sale, and your home is in reasonably good condition||An instant cash offer from an iBuyer|
|Your home could fetch a great price with some repairs, but you're not willing or able to spend the necessary time and money||A cash offer from a local real estate investor|
|You want to get the maximum value for your home||Listing on the open market with a real estate agent|
Best For Homes in Poor Condition: “We Buy Houses” Companies
Cash buyer companies do exactly what the name suggests: buy homes directly from sellers for cash. The leading cash buyers operate nationwide, so there’s a good chance at least one operates in your area.
Cash buyer companies purchase homes most buyers aren’t interested in or can’t afford, as most banks won’t provide mortgages for homes in severe disrepair. If you feel like you’re out of options for selling a badly damaged or vacant property, a cash buyer company may be able to purchase “as is”, without requiring any repairs or contingencies.
Cash buyer companies also move fast and make the process as hassle-free as possible for sellers. In most cases, you can receive a cash offer within 24-48 hours of submitting basic information about your property (such as your address and general features about your property) and close in as few as seven days. Most cash buyer companies also cover closing costs.
There’s a major tradeoff for this convenience: Cash buyer companies pay significantly less than fair market value — sometimes as little as 50% of the home’s after-repair value, minus repair costs.
Best “We Buy Houses” Companies
We Buy Ugly Houses
Also known as HomeVestors of AmericaFull Review
- Offer in 24-48 hours
- Close in 3 weeks
- No closing costs
We Buy Ugly Houses is a national brand that’s been in the business for over 20 years, so the business’s reputation and processes for buying homes are well established. However, because We Buy Ugly Houses operates on a franchise model, the quality of the service that you receive could vary depending on your location.
Home sellers who choose to sell to We Buy Ugly Houses can expect to get far less than fair market value for their property, but the company can close in as little as three weeks.
- Get an offer in 24 to 48 hours
- Close in as little as three weeks
- No need to prep home for listing or worry about repairs
- Pays less than what sellers could net on the open market
- Quality of service varies between franchises
We Buy Ugly Houses has over 800 franchises across 46 states.
We Buy Houses
Owner of WeBuyHouses.comWebsite
- Offer in 24-48 hours
- Close in 7 days
- No closing costs
We Buy Houses has numerous positive reviews from customers, and the brand carefully vets real estate investors who want to obtain a license. They’re also able to close in just seven days, which is faster than most cash buyer companies.
Although We Buy Houses investors won’t pay what you’d get on the open market, working with one is more likely to be successful than if you were to try and find a local real estate investor on your own.
- Get an offer in 24 to 48 hours.
- Carefully vetted real estate investors.
- Close in just seven days.
- Little to no room for negotiation once an offer has been made.
- Investors have some freedom to price homes in a way that they see fit, so offers may be better in some regions than others.
- Pays less than fair market value for homes.
We Buy Houses has over 2,7000 offices across 49 states.
A regional cash buyerFull Review
- Fast closing times
- Limited regional availability
- Free moving service
MarketPro might be an option for home sellers who need to sell fast and don’t mind leaving some money on the table, but they only operate in a handful of states. Furthermore, the way that MarketPro calculates their offer is inherently misleading, as they claim they just deduct 10% from the price you’d get on the open market in order to save you time and help you avoid selling costs. In reality, they deduct 10% from what they estimate your net profit would be, which makes their service seem like a better deal than it actually is.
- Free moving service
- No need to make repairs before selling
- Close in as little as seven days
- Only available in a handful of states
- They pay 10% less than what they estimate you’d net after all of your costs selling on the open market
MarketPro HomeBuyers operates in Virginia, Pennsylvania, Maryland, and Washington, D.C.
I Buy Houses
Connect with real estate investors
- No guaranteed offer
- National network of investors
I Buy Houses sells leads from home sellers to a network of real estate agents and real estate investors. When you submit your information on the website, there’s no guarantee that you’ll receive an offer or that you’ll even be contacted, which could be a problem if you need to sell fast. Furthermore, I Buy Houses does not have any criteria for investors who want to join their network, so home sellers who are contacted by an investor through the site should do their own due diligence.
- Gives home sellers an opportunity to connect with local real estate investors
- I Buy Houses does not vet investors. Anyone can pay the subscription fee and sign up.
- The company has no standards to govern how transactions are conducted.
- There’s no guarantee that you’ll be contacted, or that you’ll receive an offer.
IBuyHouses.com has over 6,000 subscribers across all 50 states.
Best Balance of Speed and Price: iBuyers
iBuyers are real estate companies that buy and sell a high volume of homes, typically using venture capital (it’s a still-evolving business model). Though iBuyers are only available in 30-40 cities so far, some plan to expand in the coming years.
Because iBuyers have slim profit margins, they look for homes they can purchase and resell with minimal work. They won’t typically buy distressed properties, or older homes built before 1930-1950, depending on the specific iBuyer’s criteria.
Like cash buyer companies, iBuyers move quickly. Most provide a preliminary cash offer within 24-48 hours and close in as little as two weeks.
But unlike cash buyer companies, iBuyers pay much closer to fair market value for homes — in part because they’re selective about the homes they purchase.
You’ll still have to pay for repairs the iBuyer’s inspectors identify and a service fee that’s comparable to real estate commissions — you can pay from the proceeds of your sale — but you may walk away with nearly as much as you’d earn on the open market.
» READ: What is an iBuyer?
The largest iBuyerFull Review
- 5% service fee
- Available in 40+ metro areas
- Close in 14 days
In comparison to other iBuyers, Opendoor offers the best value because the fees are capped at 5% and they pay close to fair market value for homes. Sellers should be aware that Opendoor deducts repair costs from their final offer, and the company no longer allows home sellers to handle repairs on their own.
- Free, no-obligation offer
- Close in as little as 14 days, or longer if you need it
- Available in over 30 markets and continuing to expand
- No control over repair costs
- Strict criteria for purchasing homes (no structural damage, no homes pre-1930, etc.)
Opendoor is currently available in 40+ major markets in 17 states: AL, AZ, CO, FL, GA, ID, IN, MN, MS, NV, NC, OK, OR, SC, TN, TX, and UT.
Alabama, Arizona, Colorado, Florida, Georgia, Idaho, Indiana, Minnesota, Missouri, Nevada, North Carolina, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Utah
Zillow's iBuying solutionFull Review
- Service fees can be as high as 9%
- Close in just 7 days
- Up to 90 day closing window
Zillow Offers is one of the only iBuyers to offer a closing window of up to 90 days, which could be helpful for home sellers who need extra time to transition to their next home. However, Zillow’s fees are high — as high as 9% — and they charge an additional 6% in selling costs.
- Flexible closing window (7-90 days)
- Cash offer in just two days
- Dedicated Zillow Offers advisor for every customer
- High fees — up to 13% of the total sale price
- Strict home eligibility criteria
- Little to no opportunity to negotiate on price
Zillow Offers is available to home sellers in 25 metro areas across 12 states: AZ, CA, CO, FL, GA, MN, NV, NC, OH, OR, TN, and TX.
High service feesFull Review
- 6-10% service fee
- Close in just 10 days
- High repair costs
Offerpad can provide home sellers with a fast cash offer and quick closing, but their reputation isn’t as good as other iBuyers, particularly when it comes to their repair costs and their 1% cancellation fee.
- Close in just 10 days
- No need to repair or prep home
- Extended stay option for home sellers
- Customers report high repair costs that reduced their final offer dramatically
- Closing costs and service fees add up to over 10%, in some cases
Offerpad is available in 18 metro areas across 11 states: AL, AZ, CO, FL, GA, IN, NV, NC, SC, TN, and TX.
Broad purchasing criteriaFull Review
- Fees from 6-12%
- Close in 10 days
- Buys vacant or occupied houses
Redfin Now can provide home sellers in select markets with a fast, predictable sale. Unlike most iBuyers, RedfinNow even buys vacant homes, which could be good news for sellers in difficult situations. However, the high service fees and additional closing costs could be expensive.
- Purchases homes as is, with broder eligibilty criteria than most iBuyers
- Flexible closing window of 10-60 days
- Fees can be as high as 12%
- No home trade-in incentive
- No late checkout option
RedfinNow is available in 20 metro areas across ten states: AZ, CA, CO, MD, MA, NV, OR, TX, VA, and WA. It’s also the only iBuyer currently operating in Washington D.C.
Buy a new home before you sell you old oneFull Review
- 1.25% fee to trade your home
- Flexible timeline up to 6 months
- $25,000 cash advance
Knock’s business model is not like typical iBuyers since it’s actually a home trade-in service. For home sellers who are struggling with timing the sale of the old home in order to purchase a new one, Knock can make the situation easier by giving you the ability to make a non-contingent offer. However, you’ll have to pay a 1.25% fee for this service.
- Make a non-contingent offer to buy your next home
- $25,000 interest-free cash advance
- Avoid paying two mortgages at once
- Doesn’t work with owners of distressed properties
- Old mortgage must be repaid after closing
Knock is currently available in 50 metro areas across 10 states: AZ, CA, CO, FL, GA, MN, NC, SC, TN, and TX.
Buy a new home before you sell you old oneFull Review
- 6% service fee
- Backup offer from Orchard
- Full listing service
Orchard makes it easier to finance the purchase of a new home before you sell your old one, but they’ll only purchase their home directly from you if it doesn’t sell on the open market after 30 days. If you want a fast, predictable sale, a traditional iBuyer is still a better option.
- Leverage the equity in your current home to buy a new home
- Avoid paying two mortgages at once
- Sell directly to Orchard if you can’t sell on the open market
- Only available to customers in four states
- High fees — 6% service fee plus closing costs and repayment or old mortgage
Orchard is currently available to home buyers and sellers in 11 metro areas across five states: CO, GA, NC, TX, and VA.
Best For “As Is” Properties With Potential: Local Real Estate Investors
If you don’t want to work with companies that buy houses for cash, you have other options.
Local real estate investors are always on the lookout for properties. These investors generally fall into two categories:
- Flippers, who renovate and resell properties
- Landlords, who renovate and rent properties
This option is best for homeowners willing to network and negotiate with investors in their community, typically through in-person meetups or online forums. You can also use third-party companies, such as Sundae, that make introductions to real estate investors.
These specialized buyers often purchase properties as-is — particularly if your home is in a desirable location or has considerable resale potential or rental value.
Because investors buy and sell properties frequently, they can usually make you a fast offer and close on your timeline. Their funding sources may also allow them to skip the lengthy closing process traditional lenders require.
Real estate investors can drive a hard bargain, however, since they primarily earn money by acquiring homes for less than fair market value. Only engage with these investors if you’re certain about your bottom line and know how much your home is worth.
For example, house flippers almost never pay more than 70% of the home’s after-repair value. Landlords base their pricing on the property’s potential revenue and usually look to earn 2% or more of the home’s purchase price each month.
Companies That Connect Home Sellers With Real Estate Investors
Get multiple bids from real estate investorsFull Review
- Compare cash offers
- Designed for distressed properties
- Fast closing with no service fees
If you’re looking for a cash offer from a real estate investor, Sundae offers a unique marketplace where pre-vetted investors can bid on your property. Compared to other cash buyer companies, Sundae’s model creates competition that may lead to a better sale price — though cash offers will almost always be lower than offers from the open market.
- Work with pre-vetted investors. You don’t have to worry about whether a random cash buyer has the funds to purchase your home — before an investor joins the marketplace, Sundae vets their credentials.
- Receive multiple offers. Sundae’s marketplace allows multiple investors to bid on your property. According to Sundae, the average seller receives around 10 bids, with a price range averaging around $71,000 between the lowest and highest offers.
- Skip repairs. Since Sundae’s marketplace is built for investors who are prepared to buy homes in as is condition, you don’t have to worry about making any changes to your home or cleaning it out.
- Get a cash advance. Sundae provides a $10,000 cash advance to sellers to help with any expenses before or during closing.
- Offers may be less than fair market value. The offers you receive through Sundae will likely be less than the fair market value of your home (which is typical across most cash buyer companies).
- Eligible locations are limited. You can only use Sundae’s services in several California cities, as well as the Tampa and Atlanta metro areas.
Sundae mainly operates in California — specifically in Los Angeles, Orange, San Bernardino, Riverside, and San Diego counties, as well as the Sacramento metropolitan area.
The company is continuing to expand into new locations, most recently the Tampa, FL, and Atlanta, GA, metro areas.
Best For Getting a Competitive Price: Working With a Listing Agent
When it comes to selling a home, listing on the open market is by far the most common approach. Almost nine out of 10 sellers used an agent in 2020. Today, you can turn to real estate companies like our friends at Clever instead of searching for an agent on your own.
If you’re looking for a cash offer, or just need to sell fast, listing on the open market may still be an option. It all depends on your local market conditions.
In a hot market where demand for homes exceeds the number of available listings, you’ll have a better shot at receiving multiple offers that can drive up the asking price, skipping offers with contingencies, or just being choosy about your buyer. When homes are in short supply, buyers are also more willing to expand their criteria — including fixer uppers or homes in poor condition.
Though the open market has a reputation for moving more slowly than other options, speed also depends on local market conditions. For example, 2021 has been defined by heated competition among buyers for scarce listings.
A listing agent can help you achieve your home selling goals, whether you want to tap into their connections to real estate investors, develop an aggressive marketing strategy, or simply attract the highest possible offers.
If this is the right approach for you, working with our friends at Clever is your best bet. Not only will you sell your home for top dollar, Clever sellers get offers 2.8x faster than the national average. Even better? You’ll only pay 1% or $3,000 in listing fees — helping you save thousands on commission.
Are “We Buy Houses” Companies a Ripoff? Depending on your situation, cash buyer companies could provide a hassle-free way to sell a distressed property. But if you want to get the maximum value for your home, an offer from a “we buy houses” company might leave you feeling ripped off. Learn more!
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