The Mechanics and the Economics of Cash for House Buyers

“Cash for houses are the lowest of lowball buyers, in the express business of making a fast buck off of you.”

“Cash for homes companies aim to buy at an average of about 65 cents on the dollar then quickly flip the property for a profit.”

“Cash buyers sometimes called EPs, short for “equity purchasers,” use the seller’s equity position, or lack thereof, as a starting point for negotiations.”

“A better way to extract more value from your property, is by hiring a veteran listing agent, even with commission.”

“Instead of working with a cash for house buyer, implement a few needed repairs, staging techniques and some cheap and easy cosmetic touches and you should be able to move your home for a lot more money.”

These are some of the common misconceptions associated with “cash for house” businesses. Let’s get real and examine the reality. How does Simple House Solutions (SHS) actually work as a business? Does SHS really base its business on lowballing its clients?

What People Are Saying About Us

First, simply Google “Simple House Solutions Dallas” you’ll see that we have over 50 great reviews on Google from our clients. You’ll also see great reviews on Glassdoor, Mapquest, Yelp and an A+ rating on the Better Business Bureau.  Ask yourself this question, “if SHS’s business is really based on low-balling people, how did they get such positive feedback?”

The Mechanics of Our Business Is Not A Secret

We are very open about how we work. Our goal is to create a win for everyone: that includes ourselves. We are, after all, running a business. However, it also includes our investors and our clients: the people we buy houses from. If we did not make it a win for the people we buy homes from, we would not be in business long.

So, How Do We Do It?

It’s actually very simple. To get full market value for a home it must be sellable. Usually this means it has to be in very good condition, nicely decorated, clean and tidy both inside and out. Most buyers of a home are looking for just that, a home. They are going to live there. They do not want problems, they do not want to have to put a lot of work into a property before or as soon as they move in.

In other words, if there are obvious problems with your house, either it will not sell, or you will not get a good price for it. Nice looking homes, in good repair, have a chance to compete in the market.

Updating homes, replacing roofs, renovating kitchens and bathrooms, replacing siding, fixing plumbing, cleaning up back yards, replacing garage doors, is incredibly expensive. And it takes a ton of time. It’s easy to spend $10,000 to $20,000 on the simplest of things, $30,000 to $50,000 is much more common.

New home buyers looking on the real-estate market, homes listed by real estate agents on the MLS, are simply not looking to spend that kind money on top of the purchase price of the house. Why should they, when they can purchase a home that looks great, is clean and tidy, nicely decorated with no repairs needed?

If your home is not competitive, meeting all of the criteria above, it will likely sit on the MLS for months. The longer it sits there the harder it will be to sell. It’s the way the housing market works.

When to List Your House on the MLS

If your house is competitive, meeting the criteria above, listing it on the MLS is probably the right thing to do.

If you have the money to invest, the know-how, and the time to make your house competitive, listing it on the MLS is probably the right thing to do.

When to Work with a Cash for House Buyer

At Simple House Solutions we have the cash and the know how to renovate homes quickly and easily. We have a team of designers, and contractors in place who can renovate a home in a couple of weeks.
A house that will typically take the average home owner several months to renovate, we can get done in days. We are able to get those renovations done at a fraction of what it will cost an individual home owner to do. We are able to do this because we do it all the time. That’s our business.

Think of Simple House Solutions as a Home Renovator

When you give work to contractors on a continuous basis you get better rates. Much better rates. When you have a formula, a set style and set of products and materials that you use to renovate, you get them at better prices. Much better prices. When you use the same contractors for the same types of projects over and over again they are much faster at doing the work. A lot Faster. When contractors get work done faster it costs less. A lot less.

That’s how we do it. That’s how we make our money.

• If your home is not in good repair
• If your home looks outdated
• If your home needs a lot of work
• If you do not have the time to make it competitive
• If you do not have the experience to know what to do to make it competitive
• If you do not have the money to make it competitive

If any or all of the above apply to you, consider working with a “cash for homes buyer”.

How to Work with a Cash for Homes Buyer

Do what you would normally do when working with any company. Do your homework, get more than one bid.

When you call Simple House Solutions we will come out and visit with you. We will give you a frank assessment of the value of your house. If it is competitive and does not require a lot of work, we will tell you. We are also realtors so if listing it on the MLS makes sense we will be happy to do that for you.

If on the other hand it does need work, we will give you an assessment of the type and cost of that work along with an estimate of the After Repair Value (ARV) of your home. If nothing else, you will have a much better idea of the real value and potential value of your home.

If your home is one that we think we can take on as a ‘cash for house deal’, we will make you an offer there and then. You could have your house sold in days with no additional repair or renovation costs.

Our goal is always to create a win for everyone. A win for our home sellers, our investors, our contractors and ourselves. Only by doing that do we have a sustainable long-term business.

Our Know How

Being successful in our industry is all about managing costs. Driving the economics of the business through efficiency. For example, materials such a siding, windows, faucets, and even raw materials such as nails and drywall can be very expensive. We buy those things in bulk; thus, we drive the economics of the business. That’s how we make a profit.

This model runs though all aspects of our business, staffing for example can be a major cost for any business. We work with the Smart VA Staffing Agency Orange County to drive down staffing costs to one sixth of usual costs. If you want to learn more about how we do that visit Staffing Agency Services to learn more. You might also find this video “A Virtual Assistant Can Change Your Life” instructive.

One of the trickier aspects of the home renovation business is knowing what to renovate and what specific types of renovation are unnecessary. What to decorate, what not to decorate and what type of decoration aids in selling a property. It’s easy to make extremely costly mistakes here. Through trial and error, we know exactly what to spend money on and what expenses to avoid. Most home owners will decorate to their taste, that’s usually a mistake.

Although subtle, knowing what to renovate and to what style, along with which products to use, is a major economic driver for the business. This is why most home owners get very frustrated when they do try to renovate their home to sell it and why the common perception is that “you never get your money back on upgrades in your home.”

If you have the money and you are comfortable with risk, you can try renovating your home to boost the selling price. I can tell you from experience though, that it is not easy. It’s taken us fifteen years of accumulated experience to get that formula right.

If you are considering selling your home but are not sure which approach to take, cash for house or traditional realtor then give us a call at (972) 876-3131 and we’ll be happy to give you some tips and an assessment of the market potential for your home.