10 Questions to Ask Before Selling to a Cash Buyer
When it comes to selling your home for cash to a real estate investor, there are many upsides. From speed of the sale and lower costs, to convenience and fewer complications — the advantages of selling your home to a cash buyer are definitely worth considering.
But that doesn’t mean you don’t need to do your homework first.
Keep reading and learn what to look for (and the specific questions you should ask) to make sure your cash buyer is legitimate, local, and trustworthy.
1. How long have you been buying houses in Portland?
When it’s taking a long time to sell your home, it’s tempting to jump at a cash offer. However, we encourage you to take time to protect your interests and make sure you know exactly who you’re working with.
In particular, ensure the company you work with is Portland-based and has proven experience in the community.
Research their history:
- Are they local to the Portland area?
- How long have they been working in the community?
- How many houses have they successfully purchased? (You can verify this on the Oregon Land Records and Deeds Directory)
This information is important because for every legitimate local cash buyer out there, there are many pseudo-investors from around the nation, scouring cities in search of a deal. Some of these companies that advertise buying homes for cash are in fact just collecting leads and selling them off to the highest bidder.
A local company with a strong local presence will be transparent about their history. They’ll be more likely to have you and your community’s best interests in mind.
2. What do past clients say about their experience?
As you’re researching a company’s history, you should also find out what past clients have to say. Look for consistently positive experiences that show the investor is trustworthy and honest.
A few of the best places to look for reviews are:
You can also look for reviews on the company’s website. If they don’t have a website, or the site is sloppy or difficult to navigate, it’s a good sign this isn’t a professional company.
3. Can you provide immediate proof of funds?
A great way to weed out a shady buyer is to ask for proof of funds.
Unfortunately, some of self-proclaimed investors don’t ever plan on actually buying your home because they simply don’t have the funds to do so!
Instead, they’re hoping you’ll sign a contract granting them “equitable title.” Once they have your signature, they’ll turn around and sell your home to a real investor.
Asking for proof of funds is an industry standard and there is absolutely nothing wrong with making this request. If the investor has the cash, it’s easy for them to show you proof with a certified bank statement or letter.
If the individual refuses to show you proof, or cannot show you the proof immediately, beware.
4. Do you provide an earnest money deposit?
In addition to requesting proof of funds, another way to gauge a buyer’s ability to follow through on a purchase is to ask about an earnest money deposit.
Professional and serious cash buyers will be happy to show their dedication and ability to buy the house by depositing earnest money into your account.
For example, at Columbia Redevelopment, we always deposit $10,000 earnest money into a seller’s account to confirm our commitment to the purchase.
5. Do you require a home inspection?
A traditional buyer will make an offer contingent on a home inspection. If problems are found, the buyer will jump into negotiations, either asking you to pay for and make the repairs or making a lower offer.
If your home is in rough shape, this inspection process can be tedious and the demands from the buyer can start to add up. If you can’t meet what the buyer is looking for, you may miss out on the sale completely, leaving you back at square one.
That’s why a cash offer that’s not contingent on a home inspection is a huge benefit.
A real estate investor will be interested in purchasing your home no matter its condition. Their goal is to revamp the house, improving the property and adding further value to the neighborhood and community.
6. Do I need to make repairs first?
Even if a cash buyer doesn’t require an inspection, they may still expect you to make repairs, hire a cleaner, or leave the house a certain way. Ask about the buyer’s expectations up front.
If a cash buyer says they will buy your house as-is, it should truly mean you don’t have to do anything.
Even if you need a new roof, your home hasn’t been remodeled in decades, or hasn’t been properly cleaned in years, a trusted real estate investor won’t make an offer contingent on repairs or cleaning.
7. What are your goals with the property?
This is a great question to give you a better idea of the buyer’s business model. Understanding the buyer’s approach and business philosophy will give you a better idea of whether or not you feel comfortable working together.
Look for a company that is passionate about improving homes and neighboring communities and is not solely focused on money.
8. Do you charge closing costs or other fees?
Closing costs, fees, and commissions are common when you’re selling through a real estate agent and to a traditional buyer. However, a trusted cash buyer will never saddle you with any costs — it’s one of the big benefits of selling to a real estate investor!
Be pointed in your question — ask about any additional fees you should expect. For instance, what are the costs if you need a flexible timeline or purchase terms? If the investor bounces around the question and is unable to give a firm, straight answer, look for a better company to work with.
9. How long is your closing period?
One of the benefits of selling your home to a cash buyer is ease of the sale. That means a fast, efficient process. A good way to determine how simple the transaction will be is to discuss closing details.
A trusted, experienced cash buyer will be able to close in as little as 2-3 days. However, also look for a buyer who offers a flexible timeline based on your needs (not theirs) and will work to fit your schedule.
10. Can I sell my house in Oregon even if I’m living out of state?
If you’re trying to sell your home from out of state, make sure the buyer will be flexible (and has the ability) to work with you from a distance.
Never work with a buyer who charges fees simply because you’re living out of state. A trusted buyer will have the ability to seamlessly coordinate a site visit, cash offer, and closing date no matter where you currently live.
How can we help answer your questions?
At Columbia Redevelopment, we’ve been buying homes for cash in Portland for years. We have a reputation for providing honest, trustworthy, and fast service and will buy homes in any condition, without fees or inspections.
If it’s time to sell your home, we’re here to help.
If you’re interested in learning more about our company, give us a call at (503) 406-9874. We’re more than happy to answer all your questions and help you feel confident in your decision to partner together. We can’t wait to hear from you.