Blog

How to Qualify a Professional Cash Home Buyer

How do you know when you’re working with an honest, reliable, and trusted professional cash home buyer? That’s today’s subject, as we get ready to list one of our latest rehabs out here in Kansas City, Kansas.

In the traditional real estate market, the cash buying experience has always been related to negative connotated life events, whether it be a divorce or an illness, or a loss of a job. An estate, a funeral, something to that effect.

Work with a Trusted Kansas City Cash Buyer

But in today’s world, at least for KC Property Guys, we are getting more and more calls of people that ultimately just want to consider it as an option because it’s easy, it’s convenient. So as it becomes more prevalent, as those calls come in, how do you know as a seller whether you’re working with an honest and reliable trusted cash buyer?

This particular house that we’re in, it’s Kansas City, Kansas. It’s pre-clean and pre-list. We’re getting ready to probably list it this week. But ultimately it came through a homeowner that just wanted to consider the option because it was easy. It was a convenience to her.

And so that’s what we ultimately did. We’ll walk through it so you can take a look at it here in just a bit.

But how do you as a home seller consider the cash buying experience and qualify it? One of the things that you’ll want to look into, there are several, but one of those things is the actual or is the person or the group, an actual cash buyer. Most of the time, they’re not. You need to be careful of that and the contract will outline that.

Many people in the market of cash buying or investment housing or investing in houses will buy houses with other people’s money, which means they ultimately will put you under contract, and then ultimately go out and try to sell the contract. They don’t necessarily have the funds to purchase it. They’re trying to use other people’s money, a C party, and transition that party in to ultimately buy it while they middleman and broker themselves a deal. Many of those can fall through. They’re less reliable than a true cash buyer, so you want to look at that.

What is the experience of the professional cash home buyer?

What’s the experience? What is the experience of the professional cash home buyer? You’ll probably want a professional cash home buyer who has been through this multiple times. Is it dozens? Is it one year? Is it five years? Is it 10 years? The more experienced, the better. And you can kind of gauge that by looking at, say, Google. Let Google be your guide. Take a look and see if they have a website. Take a look at their presence. Do they have any reviews?

Are they registered with the State of Kansas or the State of Missouri?

Do they have a better business bureau file? What’s their rating? You can do some homework to get an idea of the actual person or group that you’re working with.

What about proof of funds?

Going back to that wholesale deal or that transition from a C party to you that we talked about in the opening, if they don’t have the funds, then ultimately they’re probably going to introduce another party to try to buy the property. So you can ask for proof of funds.

What type of deposit are they putting down?

Is it a five hundred? A hundred? Are they putting any deposit at all? We’ve put deposits down as much as $10,000 for million-dollar homes out in Halbrook or Leawood or other places, but it doesn’t have to be. I mean, is it an honest earnest deposit? 1% tends to be a good guide overall.

Is there a home inspection or are they giving you a bid before the inspection?

That’s a tip-off that most likely things might be too good to be true. When you hear a number and they haven’t seen the property, they often bring in an inspector or bring in a realtor and that number begins to dwindle.

Or they’ll put you under contract at a high number and then ultimately negotiate that number down because the closing period is not quick, or it’s extended. What is that closing period? Does it fit your needs or does it fit their needs? The ones that fit their needs as the buyer, tend to be working in third parties or working in other places that will ultimately put your home and that sale at risk.

What are the closing costs?

Are the closing costs for you? Are the closing costs paid by the buyer? What are that experiences like? So you can check those.

This particular house, I think we’ve probably had a $1,000 earnest deposit. We closed it in about three weeks. That was what she wanted. In this particular house, we closed on a Thursday. She used the weekend. We took possession on a Monday. She used that weekend to ultimately move.

You can expand and create a variable experience to help meet a lot of the different needs that you might want to do and try to accomplish that you can’t necessarily accomplish with a realtor’s experience.

And that’s the beauty of cash buying. Whether you have stuff that you want to leave in the house, whether you need a customized closing experience, whether you need funds at different times, those types of variables can ultimately be dealt with when you’re dealing with a cash buyer.

Just make sure that they’re experienced and that you are trusting them because it’s essentially your largest investment that you will be making, that you’re transitioning and putting in the trust of someone that you’re just meeting. So doing your homework upfront is always a good thing.

This particular house, the seller had sold to us on a Thursday. She moved out over the weekend. We took possession on a Monday. We’ve been in here now for the past five weeks doing our rehabs. And so we’re going to take you through and walk you through the rehab experience.

This one needed some attention. I mean, wasn’t the worst of shape. It wasn’t the best of shape. On a scale of one to 10, it was more like a six or a seven. It had some good pieces to it, but it also needed a lot of attention.

We put a full exterior paint on this one. New flooring throughout. All new carpet in the bedrooms. In the kitchen, we brought in tile. Bathrooms, we brought in tile. Master bath, we brought in custom tile as well. Granite, like we usually do. Stainless steel appliances. We did keep the cabinets, but they’ve been painted with a nice high gloss finish, that’s been finished to the point where it’s going to wear extremely well.