How Does “We Buy Ugly Houses” Work?

Who is We Buy Ugly Houses?

Who typically sells houses to We Buy Ugly Houses?

Is HomeVestors a reputable company?

How much does HomeVestors pay for houses?

Does HomeVestors pay a fair price?

Who is We Buy Ugly Houses?

We Buy Ugly Houses is the commonly known name for the company HomeVestors of America. HomeVestors is a privately owned franchisor specializing in the purchase of homes for cash. The company is based in Dallas, Texas and was founded in 1989. Since then, it has expanded its franchise operations to 45 out of the 50 states. It became widely known as We Buy Ugly Houses after an advertising campaign used the phrase as a slogan in the early 2000s. Since then, most households have become more familiar with the name We Buy Ugly Houses over the original HomeVestors, but the company is one and the same. 

To understand who We Buy Ugly Houses is, you need to understand what exactly they do and how they promote their homebuying service. Essentially, We Buy Ugly Houses, specializes in the purchase of less than perfect properties that require oftentimes substantial renovations to become marketable and sold. Normally, homeowners interested in selling to HomeVestors will contact by phone or complete an online form found on the HomeVestors website. From there they’ll have a specialized professional visit their house and provide them with a quick cash offer. The offer amount is always in cash, which is a huge benefit to those who are looking to sell their properties for cash. The service is also ideal for anyone looking to make a fast sale on a property in a non-sellable condition as HomeVestors can provide them with an offer within a few days. 

• We Buy Ugly Houses and HomeVestors are the same company
• “We Buy Ugly Houses” was the advertising slogan used by HomeVestors in the early 2000s 
• HomeVestors operates in over 800 markets
• Since 1996 more than 95,000 homes have been bought under the HomeVestors franchise
• The Franchise Business Review has named it one of the Top 50 Franchises
• All cash home offers are typically made within 24 to 48 hours 
• HomeVestor’s offers are always cash offers
• Closing times when working with HomeVestors can be as little as three weeks

Who typically sells houses to We Buy Ugly Houses?

Sales to HomeVestors are typically made by homeowners with rundown properties, meaning they’d be hard to list and sell even as ‘as is’ properties. If the owners aren’t willing to put in the work or the money needed to bring the property into proper condition and sell it after restorations are completed, they can contact HomeVestors to arrange for the sale of the property through them. HomeVestors will then determine what they consider to be a fair price for the property and they’ll provide the owners with a cash offer for the purchase of the property. 

Apart from those looking to sell their properties in fairly run-down conditions, other types of sellers who tend to choose HomeVestors are those who’d like to sell their property within a quick timeframe. The real estate business cant always guarantee the quick sale of a property, but with HomeVestors, speed is guaranteed. This is in part because of the fact that once you have arranged for the inspection of your property with one of their professionals, you’ll then receive an offer within a day or two. After you have received the cash offer you have the right to either accept it or reject it. For accepted offers, the timeframe of closing on the sale of the house could be as little as 3 weeks which means that by using HomeVestors you could essentially be selling your property within less than a month. This is a huge benefit for anyone looking to make a quick sale and to get rid of their property as quickly as possible. 

Finally, the third category of of those choosing to sell to HomeVestors includes those eager to sell their property for cash. For a majority of people, cash is king. Especially when it comes to property sales, sellers aim to find ways to close the deal in all cash. While this may be a problem for regular buyers and those looking for properties in the area, for HomeVestors it isn’t an issue as they always offer cash for the purchase of your property. 

While, these are the main reasons people choose to sell to HomeVestors, a really important point to remember, and something anyone selling to HomeVestors needs to be okay with is that the offer that HomeVestors will provide you with is typically quite low. This is because of their business policy which only allows them to offer up to 70% of the property value based on the worth of the property when it’s in an immaculate condition. This is so they can ensure that they’ll have increased profits from the sale of the properties they’re purchasing. 

• HomeVestors provides cash for all property purchases
• The process of selling through We Buy Ugly Houses is simple and quick
• The full sale of the property can be completed within less than 3 months
• A cash offer on the house will be given within 24 to 48 hours from the inspection of the property
• Property cash offers by HomeVestors are capped at 70% of the property value

A smarter way to buy your home.

Buy your home and get up to 1% cashback.

Book a Call

Is HomeVestors a reputable company?

HomeVestors is a reputable and well-established company. The company has been in operation for over two decades and has grown to have a good reputation for providing a quick and easy service to those using it to sell their home. Keep in mind that HomeVestors generally operates through franchises and different franchises may offer different levels and qualities of service. As such, people who sell to HomeVestors in different areas may possibly have different experiences.

How much does HomeVestors pay for houses?

One of the main reasons HomeVestors isn’t the preferred choice for those looking to sell their properties is the amount of the cash they offer. The process is certainly quick and efficient, but when it comes down to it, the property inspection is the main determining factor for the amount of cash they’ll offer. Regardless of the condition of the property, they’ll never offer a cash over 70% of the market value, even if it was in pristine condition. Meaning that even if the house they inspect is run down, they’ll still cap the price at 70% of what the property would have sold for if it was brand new. This can often result in offers that are far too low for the properties being offered for sale. 

While the amount HomeVestors offers for properties and houses they purchase may seem low, the reality is that HomeVestors is seeking to make a profit with a model built on maximizing the profit they’ll make from the sale of each property. Essentially, one of the most important things they’ll need to consider is how much they’ll be able to sell the property for after they’ve finished with any renovations and work needed for the restoration of the property. This is why they cap the price the property at 70% of the property value, because they need the additional 30% to be able to cover the cost of material for the completion of renovations plus still enough room to make a profit after the sale of the property. 

HomeVestors offers a maximum of 70% of the property value

The offer is based on the value of the property if it was in pristine condition 

The offer for the purchase of the house is always in cash

Does HomeVestors pay a fair price?

Whether HomeVestors pays a fair price is something extremely subjective and it truly depends on which part of the equation you are examining. From HomeVestor’s side, they’re a company or a franchise needing to maximize their earnings. As such, the price they offer for the houses they are purchasing needs to factor in the price of the property, the price of the material needed for the renovation, the cost of hiring additional workers, and the cost at which they may be able to sell the property once they have fixed it. All of these factors make it almost impossible for HomeVestors to offer a price higher than the maximum offer thresholds they’ve established. From their perspective, the price they are paying is fair.

From a sellers perspective, they always hope and expect to make as much as possible from sale of their property, so they may find that the price offered by HomeVestors, which is usually less than 70% of the home value, can seem be unfair. This is especially true in cases where the house did not require extensive renovations and could have been easily sold without HomeVestors’ interference. What’s important to remember however, is that the homes HomeVestors seeks to purchase are usually the houses that could not be easily sold due to their condition. The service is not intended for those with houses in good condition, who could have easily put them on the market and received a much higher price. Those sellers, may get a faster deal through HomeVestors, but they may still feel cheated because the price and offer made to them by HomeVestors was much lower than what they wanted. Therefore, whether the price offered by HomeVestors is in fact fair truly depends on the expectations the sellers have for the sale of their property. If the seller was aware of the property’s current condition and the probability of it being sold, then they may find the HomeVestors offer fair and more importantly they may be willing to take it in an effort to sell their property faster. 

Summary

We Buy Ugly Houses, or HomeVestors, is a franchisor that has managed to establish itself as one of the go-to real estate services for those who are looking to sell their properties fast for cash. A HomeVestors sale can take less than 3 weeks to close, which makes it one of the fastest and easiest ways of selling a property for cash. The service and benefit of a quick sale comes at a cost. One of the major disadvantages is the reduced earnings sellers will receive from the sale of the property. These are especially reduced as the limit We Buy Ugly Houses sets for the purchase of a property is 70% of the property’s market value. This amount can be views as low and disappointing by those who were hoping to pocket a larger profit from the sale of their property.