[USER]

How do those ‘we buy homes’ companies estimate their FMV and what is their nominal percent offer?

For some reason, my home shows values on Zillow et al around 600k and my new mortgage company independently appraised it (virtually) at 605k.

However, many similar style/age/bed/bath homes in my area as mine sell for 450-550k.

The only feasible difference is my home has 3+ acres instead of the standard <1 acre and the stated square footage includes the basement and a converted two car garage to large room.

I will be moving in a few months and then selling the current home and I would be very happy with 500k to me (after selling expenses).

No major immediate repairs are needed, just standard cosmetic stuff.

If a realtor is able to sell it for 550k, I would likely net about the same after more months of mortgage +selling costs and commissions than if someone bought it quasi-remotely for 80-85% the listed FMV.

I also don’t want to open the spamming flood doors open by contacting those companies if they are the typical predatory low ballers.

But if someone legitimately offers 80-85% the online estimates, I would be happy with that.

*Additional note., the 500k isn’t arbitrary. $483k is the breaking point for all my home costs including numerous major repairs (new HVAC, roof, etc) and mortgage/interest costs.

[Melissa]

Please if at all possible don’t sell to one of those companies. It’s hard enough for people to buy houses now, but selling to these types of companies over inflates the market and they are terrible to their renters they rent to.

So many lawsuits.

It’s a terrible practice.

[Jamie]

Even if you want to sell to an investor, you should still work with an agent who can find reputable companies.

They can be slimy and after wasting a lot of your time, come in 11th hour and lower offer (high chance you’ll take it after all the time you’ve put in and plans and decisions you’ve made).

Try to time for December because they’re looking to unload any remaining cash.

They will close fast so be prepared before you start.

But you should first get a genuine appraisal so you know what your home is really worth.

[Mindi]

Max they offer is 70% of FMV, more likely 50-60%.

[Mark]

You have 3+ acres in an area with 1 acre lots and $500k homes? Is your lot subdividable?

If a buyer could build 2 additional homes on the property I would think that could easily be worth an additional $100k, or more.

[Cassie]

Why not list it on the market? That’s where you’ll get the best offer

[Josh]

That business model has a cap offer of 70% of after rehab value minus the cost to get it to that value.

That number will be lower if they are a wholesaler and not end buyer.

[Aud]

My cousin actually got more than what he thought he would get. He got above the zillow price.

They really overpaid for it.

Mark Spain Realty is who they sold to.

[Steven]

They will look at your home’s after repair value (ARV), deduct the cost of renovations, and their profit margin.

You might get $400k, they might put 50 to 100K into it and try and sell for 600K.

Or they will try and refinance it to get the equity once they have a tenant and use that to buy another.

If it’s in ok shape and you can maybe make simple repairs like paint and carpet you will be better off to sell with an agent to a homeowner, even if you discount it.

Flippers pretty much make their profit when they buy, by lowballing you.

[Anastasia]

We buy homes businesses are typically looking to work with sellers that need to get out of their house fast and will offer as little as possible.

[Shawn]

Don’t be surprised if they make a high offer and negotiate down after inspections and such.

Some of these companies really are clueless.

A real investor is going to pay 70% of ARV.

[Author]

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