Our offer process

How We Determine Your Offer

 

Our entire process is designed to be seamless and stress free. Unlike our competition, who will only buy 5% of homes they give an offer to, We buy Homes Near You makes offers on 100% of homes we visit, regardless of location, condition or situation.

No-Obligation, No Cost, All Cash Offer.

One of the top questions we get as an investor is, “how do you come up with your offer. Below is an in-depth breakdown of how we determine what we can offer on a property.

This is not the only way we can determine our offer. Our offer calculation can be different based on your situation and timeline, as well as what we plan to do with the property after buying it (remodel/sale, rental, resale to investor). A fast sale for you, and a remodel/resale for us is probably the most common exit.

We Compare

home values in your area and do a market analysis

We Deduct

our estimated repair costs

$0

No commissions, no closing costs or hidden fees paid by you

Receive

No commissions, no closing costs or hidden fees paid by you

One way we calculate offers

Your Offer = (ARV) – (Cost of Repairs) – (Selling Costs) – (Holding Costs) – (Profit From Resale / Remodel).

Let’s Take a Look At Each Variable Used Above In Our Calculation

The ARV is the “After Repair Value”. This is what the house would go for, if it were fully remodeled to current year standards. The ARV is determined by running comps on properties in the subject properties neighborhood.

This is pretty straightforward as to what it means, but there is a key point that needs to be made. This is “Our” cost of repairs. This means we are following our standard to get the house HGTV ready so to speak.

It is important to understand that there is a big difference in the cost of painting a room and changing the carpet, vs. painting, texturing, adding thick baseboards/crown molding and putting down hardwood flooring etc…

This includes the commissions, closing costs, and a home warranty. While you don’t have to pay a realtor fee when using a We Buy Homes Near You investor, we will have to after we remodel the home.

As soon as we buy the property, we begin paying all those things you were able to stop paying – Taxes, insurance, utilities, etc. The longer we have to keep the property before selling, the more we have to pay in holding costs. Everyday you wait to close your sale, you’re losing on Holding cost.

As much as we enjoy volunteering and helping homeowners out, in our business we have to make a profit or we won’t be able to do it for very long. This is where this comes into play.

Ready For Some Examples?

Realtor & Remodel vs. We Buy Homes Near You

Disclaimer: This example is based on a real property and actual cost estimates. In other cases, there can and will be things that are different. The most important thing to understand is that the variables in the scenarios are consistent throughout the example.

Example Property Details:

  • The house was built in 1988 and really hasn’t had much done to it except for paint and carpet over the years.
  • Comps show houses like it have sold at $110K in a similar condition but sat on the market for 2+ months.
  • Comps show the house would be worth $150K if it were remodeled to current standards (open concept, stainless appliances, wood floors, granite, etc.)
  • Your Content Goes Here

Before we start comparing, we need to determine the holding costs.

Holding Costs ($110K house paying 2.39% taxes)

  • Taxes – $219.08

  • Insurance – $67.00

  • HOA – $20.00

  • Utilities – $250.00

  • Mortgage – $527.60

 Total = $1083.68 per month

To make this example cleaner, we will round the holding costs to $1K per month.

We will also need to have the selling cost

  • Realtor commission (6%) = $9K

  • Closing Costs (2%) & Home Warranty = $4K

  • So the selling costs will be $13K total.

Let’s find out how much you would walk away with

  1. You speak with a realtor, they tell you they can get you $150K for your property if you fixed it up.
  2. You contact a contractor to update the house.
  3. You pay the contractor $25K. He remodels the house and finishes in on time in the two months they promised.
  4. You then list your property at $150K. It gets an offer the first day on the market for full price.
  5. You go to the inspection period and there are no problems.
  6. You close on the property 60 days after you first listed it.
  7. The house sells. You paid the repair costs, holding costs and selling costs.

A Break Down on the Numbers

Sold price = $150K

Repair Costs = $25K

Holding Costs=$4K (It took 4 months total to sell the property @ 1K per month)

Selling Costs=$13K

Our ideal scenario, after 4 months you are walking away with $108K, not too bad.

Now we are going to run the numbers for us to see how we determine your offer.

  • Because we already work with contractors, and we know how to setup a scope of work and a draw schedule, the remodel will cost us $15K, where it cost you $25K.
  • The scope of work and a draw schedule is used for our contractors to ensure that they meet their projected deadlines. We work with them to schedule tasks, and buy all materials so that they can focus on the work. This means we can be done in only one month, where it took two for you.
  • Then we factor our necessary profit for the deal and taking all the risks. This will vary depending whether or not we are going to keep the property as a rental or immediately sell it. In this case let’s say our necessary profit = $19,000.

A Break Down on the Numbers

ARV = $150K

Repair Costs = $15K

Holding Costs=$3K (It took 3 months total to complete and sell the property @ 1K per month)

Selling Costs=$13K

Profit From Resale=$19K

Using our Calculation

Your Offer = (ARV) – (Our Cost of Repairs) – (Selling Costs) – (Holding Costs) – (Profit From Resale)

Your Offer = $150K – $15K – $3K – $13K – $19K = $100K

So our offer to you would be $100K

A Closer Look @ the two options

Realtor & Remodel = $108K

We Buy Homes Near You = $100K

In this case we would be offering you $8,000 less for your property than you would get if you spent the 4 months doing the work and listing the property instead.

But what if everything didn’t go as planned in the Realtor & Remodel scenario…

  • What if the contractor just left with your $25,000 and didn’t do any work?
  • What it the contractor did poor quality work and the house didn’t appraise for $150,000. What if it was only $135,000?
  • What if the house didn’t sell the day it went on the market, what if it sat for a month or two before getting any offers?
  • What if there was a foundation problem or some other major issue found in the inspection? $$$

We take these risks, so you don’t have to.

Let’s Look at another alternative… What If You Decided To List As-Is?

Listing As-Is has it’s own set of challenges. Lets take the same house and see how much you could get.

Listing a house like this is more difficult to do if someone is using a bank loan. You will likely need to fix certain problems found in an inspection report or lower the cost of the property. If the person offered you cash, they aren’t going to offer $110K. They would offer you $100K.

For the sake of simplicity, let’s say that you ended up having to replace the HVAC system and a few minor things that totaled $10K

A Break Down on the Numbers

Selling price = $110K

Repair Costs/Cash Concession = $10K

Holding Costs=$4K (It took 4 months total)

Selling Costs=$10K

After 4 months your final take home would be $86K

Finally Lets See How Some Other Companies Calculate Their Offers

We will call this company – Home Buyer A

You are probably thinking $80K is a very low offer. Why not just use this other equation? – New and inexperienced buyers don’t use enough variables and it can make them less certain about the numbers they are working with. When investors are less certain, they tend to be more conservative and offer less.

A Break Down on the Numbers

ARV = $150K x 70%

Repair Costs = $15K

Desired Profit =$10K

Final take home would be $80K (Assuming they can close)

The results are typical of what you see in the industry. Taking the time to fix up and sell your house can sometimes get you the most money.

The question is: Is $8,000 more worth 4+ months of stress and uncertainty?

Selling your house to a quality home buying company like We Buy Homes Near You will give you a quick sale for a slightly lower profit. You decide if you want to trade time and stress for possibly a little more money. Selling your house As-Is on the market, or selling to someone who wants an excessive profit will end up putting you in a similar position with how much you walk away with.

Still Have Questions?

Give us a call!

+1 (844) 924-6950

Once you have given us the property details, an investor will contact you shortly (usually within 24 hours). In some situations, we will need to gather additional information. We will research your property and discuss all the details with you. We may be able to make you an offer right over the phone, or in most cases we will schedule a time with you to view the property and make you an offer!

We buy houses in any condition, in any area, in any price range, in any situation! We will buy your house as-is, you don’t need to do ANY repairs.

DIVORCE
PROBATE
PRE-FORCLOSURE
DEBT
RELOCATION
JOB LOSS
Downsizing
Tired Landlord

Whether your house is in foreclosure, over-leveraged, condemned, has liens or health department violations, not maintained, burned, damaged, or about to fall down WE CAN BUY IT!

Nothing! We do not charge you any fees to discuss your situation, make you an offer or to buy your home.

No! There is no obligation! We will simply review the information, make you an offer, and you choose to accept or reject it, it’s your choice!

ABSOLUTELY 100%! Your privacy is of the utmost importance to us. Any information you provide is completely confidential! If you want to deal with a reliable, reputable company who will treat you with professionalism, understanding, and respect – YOU HAVE COME TO THE RIGHT PLACE!

YES! We are a professional real estate solutions company with years of experience in solving these types of difficult situations. Please contact us for a confidential consultation.

Selling your home with a traditional sale requires you to get an inspection, and pay for repairs, painting and cleaning. It’s expensive and time-consuming. Then it can take months or even years – if it sells at all. That’s why we do things a different way. When we buy houses, we can pay cash for your house “as is.” That means:

  • No repairs. With us, sellers don’t have to spend time and money fixing up their house. We can buy a house even if it could use a few repairs.
  • No cleaning. Same for cleaning. It’s okay if there’s mold in the shower or cobwebs in the corner. We don’t mind.
  • No paying typical closing costs. We can take care of normal closing costs so the seller won’t have to worry about that aspect.
  • No open houses. Open houses can be stressful, as dozens of potential buyers wander through the home. With us, you’ll just meet with one person, a friendly local franchisee who is ready to make an offer.
  • No waiting on bankers. It can take a long time for a bank to grant approval, and we understand that waiting can be hard. That’s why we use a process that is quick and efficient. In fact, our sellers can even close in as little as three weeks.

Please contact us at contact@webuyhomesnearyou.com with your question and we’ll be happy to assist you.