How Does We Buy Houses In Houston Work?

  1. We Buy Houses In Houston

At Brilliant Day Homes, we buy houses in Houston TX, and we want to answer some questions about home buying companies that you may have.

How does we buy ugly houses work?

To discuss this, I am going to discuss in detail, how we buy houses companies work, what “we buy ugly houses” is, and whether or not you should work with a business like this.

Who are the we buy houses companies?

These are some type of real estate investors. In some cases, they are home flippers (renovate houses and resell them), sometimes they are buy-and-hold investors (landlords wanting new rental properties), and sometimes they are wholesalers (someone who brokers deals between a seller and an investor).

Who is “We Buy Ugly Houses”?

This is just one company out of many. Their company name is HomeVestors, and they are a larger national home buyer that has local franchises in major cities. They came up with a memorable marketing slogan that has stuck around for years, and continues to help them get business.

Should I sell my home to a we buy houses company?

This depends on if you want sell it quickly without doing any work, or if you want to put in the time and effort to get it sold on the market. It is important to understand that you are working with a business. Just like when you list your home with a real estate agent, they make money through the transaction of selling your house. Home buying companies also make money through real estate, but in a different way.

How do we buy houses companies make money?

Most companies make money through 3 different ways:

  1. They are making money by renovating and selling the house, i.e. flipping.
  2. They are making money by fixing up the house and keeping it as a rental property.
  3. They are working with other real estate investors and selling them the properties.

How does we buy houses for cash work?

We buy houses companies are direct to seller. This means that they are the ones that actually purchase your house, vs a real estate agent that is listing it for you to sell it to someone else. They are usually purchased “as-is” meaning that you don’t have to do any cleaning or repairs.

Why would I sell my home to a we buy houses company?

There are a couple of reasons why you would sell to a company that buys houses for cash.

If you need to sell your house fast

Life happens. Sometimes that means you have fallen behind on payments to the bank or on your taxes and you are going to lose your home. The advantage of companies that buy houses for cash is that they can buy your house in a few days and potentially stop you from losing your home to foreclosure where you would walk away with nothing.

You don’t have the time or energy to sell the house

There is a lot that goes into selling that you have to take care of. Some people are just not in a position where they can handle it. If you work with a home buying company, they do all of the work.

You don’t want the hassle of selling your house

Sometimes you aren’t in a hurry to sell, and you have the time to do all the work, but you just want the convenience of someone else doing all the work. It is the same reason we order delivery for food, or we hire someone to do yard work. You don’t have to be desperate to work with a business that buys houses, you may just want a less stressful path.

How much do we buy houses companies pay?

How much does a we buy houses company, or how much will we buy houses companies pay? Well, this really depends. Some we buy houses companies will give you better offers depending on a lot of different factors.

In general, the calculation that most companies use is 75% of the selling price of the house once it is fixed up, minus the cost to actually fix it up.

So, if your house would sell for $200,000 fixed up, but it would cost $30,000 to fix it up, they would offer you $120,000 with all closing costs and no repairs needed.

Do we buy houses companies make a lot of money?

Not as much as you would probably think.

Look at that example above. If they paid $120,000 for the house, spent $30,000 to fix it up, but they also had to pay holding costs while doing that work. This includes taxes, utilities, and other expenses with the house for the 2 months it will likely take to fix it and sell it on the market.

They also have to pay a real estate agent to sell it. Sometimes the companies have internal brokers or agents and can save money on this, but then they still have to pay the salary of the person who is the agent.

There are also a lot of other overhead costs that we buy houses companies have. Such as marketing. If you received a letter in the mail, well someone had to pay for that. If you received a phone call, someone was being paid to make that call. If you had a person show up for a meeting, the acquisitions personnel had to get paid.

In addition, there are client management systems and many other expenses that are regular recurring monthly expenses.

When you factor all of that in the actual profit on a house like that is likely only $5,000 – $10,000.

Why are there so many we buy houses companies?

The reason there are a lot of them is that many of them are just people looking for a way to make some money. This isn’t necessarily a bad thing, as everyone needs a job, but the majority of people that have we buy houses companies fail within the first year when they realize they can’t get rich quick.

Are we buy houses companies trustworthy?

Let me answer this with another question – how do you know that any company is trustworthy? Some companies are, and others, not so much.

That doesn’t mean that they are going to try to scam you out of your house, but it may mean that they can’t deliver on the promises that they make you. It is a similar thing when you list your house with an agent – many of them say they can sell it for much more than it is worth and can get it done a lot quicker.

Are we buy houses companies credible or legitimate?

You may be worried that some we buy houses companies will try to scam you out of your house. Anything is possible, but in most circumstances that is not the case. What I would recommend if you are worried about credibility, is to do the same thing you would do when working with any business.

1. Can you find them online?

Do they have a website, a Facebook page, or have information on Google? If there is absolutely nothing you can find, then you may want to be cautious.

2. Are they accredited?

This Better Business Bureau accreditation doesn’t mean they are a good business, but it does mean that they are a real business. The BBB accreditation requires you to pay a $700 yearly fee and also is reviewed by the bureau. A fake company isn’t going to have a BBB accreditation.

3. Do they have good reviews?

See if other people have good things to say about them. Most people don’t leave reviews, however, if you find a bunch of reviews that are bad, you may want to keep looking.

Will we buy houses companies try to pressure me into selling?

This really depends on the company. To answer honestly, some of them do…just like many other businesses. With our company, we don’t believe in high pressure sales tactics – we just want to give you a good offer on your house. If it makes sense for you, then great. If it isn’t what you are looking for maybe we can refer you to a good real estate agent that could meet your needs.

What are all of those we buy houses, or I buy houses signs I see around Houston?

Those signs are what are usually referred to as “bandit signs”. These are usually put out by individuals that don’t have enough money for a larger marketing budget. Now the people putting out the signs may not be out to scam you, but it is important to note that the city does not allow these signs, and therefore they are knowingly breaking a law, albeit a somewhat harmless one.

Is it better to use a real estate agent or a we buy houses company?

This really all depends on what your goals are. If you aren’t in a hurry to sell your house, and you don’t mind cleaning or taking care of getting your house fixed up – then you might be able to sell your house for a higher price with a real estate agent.

That doesn’t necessarily mean you will always walk away with more money in your pocket, because you still have to pay for repairs, agent fees etc.

In addition, you also take more of the risks that home buying companies take when they buy your house as is. If you go to sell with an agent and you find out that there was a hidden foundation issue or structural problem, that could cost 10’s of thousands of dollars.

If a company buys your house as is and discovers the issue, that is their problem. This is one of the main reasons that many of the people doing this go out of business. They lose a huge sum of money and are never able to recover.

We buy houses in Houston

Brilliant Day Homes is a business that buys houses in Houston, and the surrounding areas. If you need to sell your house, or are considering selling, reach out to us.

Give us a call anytime at (713) 903-2582 or fill out the form on our website today!


Kevin is the co-owner of Brilliant Day Homes, and primary author of the Brilliant Day Blog. He grew up around real estate investing and spent summers working on rental properties for his dad, who runs a home renovation company with Kevin's brother. He enjoys spending time with his wife Savannah, and children Isaac and Amelia. He also has a passion for volunteering and usually spends several hours each week doing so.

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