Home purchasing companies

[vince1234]

I have an investment property in San Diego that I'll probably sell before 2023 to take advantage of the "2 out of 5 years" home sale tax exclusion. Just got a letter from a company called "Open Door", which claims they'll buy the property with many fewer hassles than the typical real estate agency process. I assume the downside is I'll walk away with less than I would if I'd listed with an agent.

Has anyone sold property using a company like this? What was your experience like?

[WanderLucky]

I have an investment property and I get developers contacting me at least once a week to purchase the house. I just got another one this morning.
From my experience, they usually offer below market value, but with no real estate fees (I think that means the typical 6% for agents but you still need to pay for closing costs, but it's probably depends on what you negotiate) and usually longer close times (6 -18 months). The few times I talked to some of them, they seemed kind of sleazy and more recently try to pressure me by saying how the market is dropping so I should take advantage of their offer now.
I'm waiting to hear what this latest developer offers, but the one about 3 weeks ago was actually not terrible. One of my issues with them was that I googled the company and I saw lots of negative reviews about how they took advantage of elderly clients and often lowered the price offered right before the closing date. So I guess to me that just means go in with eyes wide open, have a real estate attorney review any docs before signing to ensure they can't lower the price, and maybe have a contingency plan in case it doesn't work out.
I'm still leaning towards putting my house on the market, but waiting until the tenants move out at the end of the month to assess the situation and do the math once I know the repairs needed.
Edit to add: I just looked into OpenDoor and this sounds a little different from what I was talking about. They're considered an "iBuyer" and buy very quickly. Looks like they still charge about 6% in fees though.

[clifp]

I have an investment property in San Diego that I'll probably sell before 2023 to take advantage of the "2 out of 5 years" home sale tax exclusion. Just got a letter from a company called "Open Door", which claims they'll buy the property with many fewer hassles than the typical real estate agency process. I assume the downside is I'll walk away with less than I would if I'd listed with an agent.

Has anyone sold property using a company like this? What was your experience like?

The one thing, I really wish I could change in my rental experience is not using an LLC to buying a property.  I get daily phone calls, text, emails, and direct mail pieces for my properties in my name and zero for the properties in the LLC.

The short answer, is they are definitely less hassle than selling any other way. They'll come to your property do a quick look through and make a cash offer and sometimes within 72 hours and almost always within 10 days give you cash.  But you'll avoid inspections, appraisals, and the back and forth about fixing XYZ before you sell.

That's good news, the bad news is they going to offer you between 25-75% of what the property is worth. So you are almost always better off using a traditional agent if you want avoid being ripped off.  But if you need cash fast...

That said in the last year or so I've received a couple of offers within 90-95% of Zillow and appraised value of some of my properties. I have not bother to contact the buyers to see what the catch is.

[Dicey]

Why do you want to go this route? You know their goal is to obtain property for below market value.

[dresden]

Here was the preliminary offer we received from opendoor:

Preliminary offer
$593,400

Our home wasn't perfect and sold for 725,000 and was adjusted down to 717,500 after inspection.

So after real estate commissions that is about 80k more by selling through the MLS.  That is a lot of money to walk away from for convenience.

My understanding is that their contracts aren't your typical real estate agreements - they are very one-sided in their favor.

The market is changing, but inventory is still low in the two places I've checked.

[iris lily]

I get those calls every week.

One of the caller’s screeners sounded somewhat smart and not sleazy, so I actually engaged with him. Mainly because we are going to sell our house anyway, so might as well invest a little time with these guys to see what kind of money they come up with.

The initial screener (from India?) turned me over to his in-town buyer who is also not sounding like an idiot. He and I had a couple of phone calls, I sent him photographs and said I wanted $350,000 for our property. He said he couldn’t meet that price so he didn’t give me a number, but that’s OK. We ended up selling it for $410,000 using a 3% commission. The real estate commission was half of the normal because we found the buyer, and then we turned the deal over to our friend and real estate agent to handle for us because I didn’t want to do the negotiations with our buyer.

I will also add that one of the collars gave me over the phone a quote of $189,000. We sold it for $410,000.

[vince1234]

Here was the preliminary offer we received from opendoor:

Preliminary offer
$593,400

Our home wasn't perfect and sold for 725,000 and was adjusted down to 717,500 after inspection.

So after real estate commissions that is about 80k more by selling through the MLS.  That is a lot of money to walk away from for convenience.

Oof - I agree! Not even close to worth it.

[vince1234]

I will also add that one of the collars gave me over the phone a quote of $189,000. We sold it for $410,000.

Lol - lowball offers never go out of style, I guess!

[clifp]

I will also add that one of the collars gave me over the phone a quote of $189,000. We sold it for $410,000.

Lol - lowball offers never go out of style, I guess!

Here is the thing, sometimes they work.

In the last few year, I've bought 5 or 6 houses at prices ranging for $8,000 (not a typo) to $40,000, all  less than my Model 3, in the Kansas City area.
Now by "bought", I provide the funding for the purchase and an additional $20-$40K for repairs as a hard money loan.  They got fixed up and flipped for $100-$150k, several months later.

Now, these were awful houses., in fact the company that locates these "motivated sellers" motto is we buy ugly houses.  I've never seen the houses, but I've seen pictures and they were ugly, filled with crap, badly in need of new flooring, paint, and often a furnace, plumbing or other issues. Generally about 1,000 sq ft,  3 bdr 1.5 baths and 60-90 years old.

I'd say most were worth 2-4x what the company bought them.  The reason people sold so cheap was varied, they moved out of town to take a new job, their parent's house and didn't live in the are, they couldn't get a loan to fix them up. In one case, another buyer told me the guy needed $250K by Friday to make payroll, in order to keep a $10 million contract his company had won.