You have seen them. We buy houses, any condition, fast close, and a phone number on a tag stapled to a pole by the freeway ramp. One genre of advice says they are all predatory. Another says they are the answer to everything. Both are selling you something.
I am a REALTOR, which means I am paid when homes are listed, and I also run a separate business, Lucano Buys Houses, that buys houses directly. I have a stake in this topic from both directions, so I will stick to things you can check yourself.
WHO IS ACTUALLY BEHIND THE SIGN
- A flipper. They buy the house, fix it and sell it. They need the discount to cover the repairs and still make money. Straightforward.
- A wholesaler. They do not buy the house. They get it under contract and sell that contract to someone else. Legal, common and worth understanding before you sign one.
- A landlord or small investor. They want to hold the property and rent it. They sometimes pay more than a flipper because they do not need the same margin.
- An agent or brokerage using cash-offer language. They want a listing and are fishing with the wording. Sometimes that works out well for the seller, and sometimes you get pitched a listing you did not ask for.
THREE QUESTIONS THAT SORT THEM OUT
You can identify almost anyone in about four minutes with these.
- Are you buying this house yourself, or assigning the contract to someone else? A wholesaler should say so plainly, and a dodge tells you something.
- What happens if you cannot close? A real buyer has a real answer about their funds. A wholesaler needs to find a buyer first.
- Will you show me the arithmetic behind your offer? Not an appraisal, the math: repairs, holding costs and what they need to earn. Anyone who will not walk you through it is hoping you will not ask.
WHAT A FAIR OFFER LOOKS LIKE
A cash offer is not the value of the house. It is the value of the house, minus what the buyer has to spend, minus what they need to earn, minus the risk they carry while they wait. That last item is real, and sellers usually find it the hardest to accept.
If the discount looks enormous, ask which line item is eating the difference. Sometimes the answer is legitimate. Sometimes it means you called the wrong number.
KNOW WHAT THE OPEN MARKET WOULD PAY FIRST
An offer means little until you know what the house would likely sell for on the open market. That is a number a REALTOR can show you, with the comparable sales listed, before you spend a minute negotiating with anyone. You can ask for a home value at no cost and with nothing to sign, and use it to judge any offer you receive, including one from me.
THE PART NOBODY TELLS YOU
You are allowed to talk to several. Nothing about a sign obliges you to a single conversation, and there is no fee for asking four people what they would pay. Compare terms, not just numbers, and be suspicious of anyone who rushes you past the part where you read things.
Question for you: have you ever called one of those signs? I would like to know what happened, because the answers people give me are all over the place.
