Summary: To ensure you’re getting the best and safest offer for your property, ask your buyer these three questions:
- How do you finance your deals?
- Who’s your title company?
- Can you provide a list of references?
You’re ready to sell your house, and you need to do it quickly. You’ve decided to skip the traditional selling process because your house needs a lot of work, and you don’t have the time or money to prepare for inspections and open houses. So, you’ve been looking into “we buy houses” companies because they claim to buy houses for cash in any condition.
The question is, how do you know who to trust? How can you ensure you’re getting the best offer for your property? How can you avoid getting scammed altogether?
Thankfully, by asking the right questions upfront, you can get the peace of mind you need to make a successful move.
Here are the top three questions you should ask your potential buyer before accepting their offer:
1. How Do You Finance Your Deals?
Why ask? The more secure a buyer’s financing is, the less likely it is that your deal will fall through.
When a home investor or flipper offers to purchase your property, you may think they have the cash in the bank right now to pull it off. But that’s not always the case. It’s important to know how your buyer plans to pay for your property, because some financing options are more secure than others.
For instance, many buyers rely on bank loans in order to purchase properties. If that’s the case, then it is not always guaranteed that their loan will be approved. If the buyer defaults on another loan involving another property, then it might affect their ability to close on yours.
Other buyers, called wholesalers, will offer to “buy” your property without actually paying a dime for it themselves. After signing a contract with you, they will sell that contract to a real buyer who has the funds to pay you. This is a very common practice in the real estate industry, and it’s not exactly scammy, but it isn’t always a clean deal, either. Usually, the more people who are involved in a deal, the more likely it is that the deal will fall through in the negotiation process.
One important thing to add here is that if you’re working with a wholesaler, you’re likely not getting the best possible offer for your home. That’s because the investor who is actually paying for your property also will have to pay the wholesaler a finder’s fee, which comes out of your cut.
The most secure way to sell your property is to an investor who has the funds and ability to pay you directly, without loans and without selling your contract to another person. This type of investor usually has the experience and skillset to pull off a deal with cash in the bank to prove it. And since they aren’t desperate to close a deal, they won’t resort to shady tactics that others may use. Our team at Integrity Cash Home Buyers, for example, pays cash for every property we purchase—from our own bank account.
What to say: “How do you plan to finance this deal?” “Do you have the funds to make this purchase or will you need to get a loan?” “Do you plan to sell my contract to another investor?”
2. Who’s Your Title Company?
Why ask? When there are title disputes, liens, or other title issues, you need a reputable title company to resolve it efficiently and legally.
The job of the title company is to ensure you are legally able to sell the property to your buyer. Without a clean title, you cannot sell your house, period. If there are liens, title disputes, or other issues involving your title, which is common, the title company will help resolve these issues. So, it’s important that your investor has a working relationship with a reputable one.
If you investor does not have a working relationship with a (preferably) local title company or plans to “find one” after you accept their offer, then that is a red flag. Your investor should be able to tell you the name and contact person of their title company, and you should be able to look online and verify that they are a legitimate company.
What to say: “What title company do you work with?” “Does your title company have experience resolving title disputes, liens, etc?” “How long have you been working with this title company?”
3. Can You Provide a List of References?
Why ask? When others have had good experiences with your buyer, it is likely that you will have a good experience, too.
More and more, sellers count on reviews to determine which buyers are the best to work with. The first and easiest place to look for these are on Google. Star ratings provide a quick glimpse of the quality of the investor, while detailed reviews can give you insight on others’ experiences with that investor—good or bad. If the investor has taken the time to repsond to these reviews—especially the bad ones—even better.
While it takes time for investors to build a portfolio and amass hundreds of reviews online, a short list of references who you can call and talk to will also go a long way. It can be helpful to ask your buyer to provide the names and phone numbers of 2-3 past clients who can attest to their work. A reputable buyer should have no problem providing this list.
When you call the references on your buyer’s list, you can ask them to share their experiences candidly with you. You’ll want to know about your buyer’s strengths and any weaknesses or obstacles their clients encountered.
Once you get the greenlight from their references, you can rest assured that you’re working with a trustworthy company or individual.
What to say: “Please send the names and phone numbers of 2-3 references.” “Do you have reviews page on your website that I can see?”
Other Questions to Ask
You’ll likely have additional questions for your buyer, and it is important that you get answers. If your potential buyer seems annoyed or frustrated when you reach out for support, then they may not be the best buyer for your property. Fast cash home deals can happen quickly, so you’ll want to work with someone who you can trust and who will take the time to explain the process to you.
Some other questions you may want to ask your buyer are:
- How long have you been in business?
- How many properties have you purchased?
- Do you have your own contractor?
- Are you a licensed real estate agent?
- Would I be able to set the closing date?
- How long do I have to leave the property after closing?
The answers may surprise you. If you live in Hampton Roads, Virginia and are looking to sell your house fast for cash, our team at Integrity Cash Home Buyers can answer all of these questions for you and more. Give us a call at 757-276-3322 and request a free, no-obligation cash offer today.
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