Who Buys Houses in Any Condition?

You've likely seen the signs on the side of the road – “We Buy Houses in Any Condition” or “I Buy Houses in Cash.” Who are these people who buy houses? And how and why do they buy houses no matter what condition they're in or what repairs they may need? These people – including us here at AMI – are referred to as house buyers or cash house buyers.

We are real estate investors who buy houses and we buy houses for cash. After purchasing a home, we either flip them or rent them as landlords after investing some cash into them to make repairs to get them “rent-ready.”

While cash buyers purchase homes at a discount off their retail market value, selling to one has numerous non-monetary advantages.

Key points from this article:

Disclaimer – The information on this page is intended for general informational purposes only and not to provide legal advice.

Speed

Cash house buyers are companies that buy houses in any condition and can typically close on the sale much faster than a traditional buyer using a mortgage to purchase a home. For instance, at AMI, we can close on homes as quickly as 3-21 days, depending on the complexity of the situation.

Homeowners facing an imminent foreclosure sometimes find themselves with only days to sell their homes before they are auctioned off at county auctions. Having their home auctioned at foreclosure often destroys their credit and ability to purchase a home in the future for up to four years.

Or, someone may have inherited a house that has a hefty mortgage payment and property taxes that they are unable to cover long enough to sell the home on the retail market. Cash buyers can provide a level of speed in purchasing the home most other buyers cannot.

How fast a cash home buyer can close depends on the complexity of title and how many parties and liens are involved. If the owners are a husband and wife in agreement on what to do, with a mortgage loan being the only lien on the home, the closing can happen as fast as 3-7 days.

If the home was inherited, has six heirs, a mortgage, and a tax lien, it can take a little longer to close on the sale. However, experienced house buyers like AMI have the knowledge and team to get these issues handled and still close on a short timeline.

Buying as-is

Believe it or not, the worse shape the home is in, the more interested a house buyer typically will be in purchasing it. Real estate investing is a numbers game. They don't care if the home needs a new roof, has taken on fire-damage, or has an active termite infestation.

Real estate investors tend to get discounts on their home renovations and repairs because they are repeat customers to their tradesmen. Those discounts, coupled with the lack of standard buyer interest in homes that need significant work – which lowers the market value of the home, leave room for the investor to turn a profit. They buy the house below retail, and fix it up for less than a regular homeowner could to either rent or resell.

While real estate investors will also purchase homes in excellent condition, they typically prefer homes that need repairs – where the owner wants or needs to sell the home as-is.

No commissions

As mentioned above, house buyers need to buy homes below retail value. That said, they also don't charge Realtor commissions on the sale (in Texas, most Realtors charge 6% commission). Cash buyers also typically pay all closing costs – something that tends to be covered by the seller in a traditional on-market sale. Those closing costs can cost sellers another 1-3% of the sale price.

However, house buyers are looking to get a double-digit discount on the retail value of the home. While you won't need to pay any commissions or closing costs, your net profit from the sale may still be lower than what you would get if you sold the home on the traditional market. You can see our chart comparing the net profits of using a Realtor vs. selling to a house buyer here.

But, you also don't have to do anything to prepare for a sale. You don't need to have any showings or wait weeks or potentially months to get an offer while paying the mortgage, taxes, utilities, and HOA dues. You also don't risk a buyer's financing might fall through, and you'll have to start the entire process all over again.

Do cash house buyers really pay cash?

Lastly, you might be asking yourself how these investors are purchasing these homes. Are they really buying them in cash? The answer is yes, and no.

Real estate investors typically use money from hard-money lenders or private money lenders to finance their purchases. While it is technically still a loan, it's not a loan in the traditional mortgage sense. Conventional mortgages require underwriting, appraisals, and time to verify everything and authorize funding for the loan. Traditional mortgages can typically take anywhere from 21-45 days to close after the buyer puts the home under contract.

Homebuyers usually have a partnership with several private lenders. These lenders lend them money at higher rates of interest that allows them to purchase a home quickly using their lender's cash. These relationships enable cash buyers to buy a home without all the red tape typical mortgages require. Then the investor either flip the house or later refinance it using a traditional mortgage to become a rental – paying the private lender back their cash with interest.

When an investor has proven to be successful, their lenders will typically come to trust their numbers. The investor will present their deal to one of their private lenders and usually get an approval within hours to use their lender's cash to purchase the home.

As far as the homeowner selling the home is concerned, it is nearly identical to as if someone was buying your home in straight cash. Cash house buyers who have good relationships with their lenders – as we do – don't need to do appraisals, home inspections, or go through any underwriting process.

We present the deal to our lenders and can get a green light to purchase the property nearly immediately. The private lender then transfers the cash to buy the home to the title company for their investor partner. The investor can then buy the house as soon as their title company can clear the sale.

However, remember that not all companies that buy houses for cash or everyone who advertises themselves as a cash buyer is reputable or has strong relationships with private money lenders. You can learn how to spot legitimate house buying companies from scam artists here.

Need to sell fast?

We can help. We buy houses as-is. Contact us for a free consultation. We will present you with several options for liquidating your home available to you based on your specific situation – including providing you with a free, no-obligation cash offer. We buy houses all over the Houston area and strive to create win-win situations for everyone involved.