Cash home buying companies advertise that they can give you a cash offer on your home within 24 hours. You might be wondering how they calculate your home’s value in such a short time. It’s no mystery; they use the same factors that traditional home sales agents use.
Comparison to Similar Homes
First, cash buyers take a look at the size, style, and features of your home. They consider the number of bedrooms and bathrooms, and whether there’s a garage or a basement. They’ll look at amenities such as a pool, fireplace, or large yard.
Then, they’ll compare your home to similar houses in your area. They’ll examine what those comparable homes have sold for in the recent past. It’s likely that your home would sell for a similar price if it were listed on the real estate market.
Evaluation of Location
The location of your home can make a significant difference in its value. The condition of your neighborhood, its safety, and its proximity to schools and shopping all contribute to your home’s expected selling price.
Homes may be valued less if they are located near hazards or problem areas such as flood zones, railroad tracks, or the city dump. By contrast, a home located with easy access to major highways or public transportation may sell for more.
Estimate of Repairs Needed
Finally, the cash home buyer will estimate how much it will cost to make repairs on your home. Cash home buying companies purchase homes without requiring repairs. However, when they fix up the home and resell it, the cost of repairs can make a difference in their profits.
If your home is in relatively good shape, you may get a higher cash offer. However, if your house has serious defects such as a bad roof, plumbing, or heating or cooling system, you should expect less. The cash buying company will consider its expenses when making a cash offer.
When you request a cash offer from a home buying company, the total may be a bit lower than the price you might ask for on the real estate market. But, keep in mind that in a cash sale, you don’t make repairs or pay commission or closing costs. In that regard, a cash home sale can be comparable.
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