Selling to ‘cash for houses’ companies quick, but yields less money

Q: I had rental property for 25 years, but I’m getting tired of it. With a rental house just now vacant and needing some fix up, I want to unload it.

When I Google “sell house” I get 25,800 numbers that will buy immediately for cash. Can I trust them? — D. G., via askedith.com

A: You could probably trust many of them, but you need to understand what’s involved.

People who buy as-is for cash cannot offer you market value. Their business involves purchasing at wholesale and hoping to sell later at retail. Till that’s done, their money will be tied up, producing no income.

Meanwhile, they’ll have expenses for property taxes, insurance premiums, renovations, heat and light, lawn maintenance or snow removal — well, I don’t have to tell you. Those are the costs you have now and want to get away from.

Your buyers will also allow a margin for unanticipated problems and include something for profit — why else would they buy in the first place?

You can see that you’ll be offered a substantial discount from what the property might bring on the open market.

You’ll have to decide if that route is worth it to you, in return for the luxury of getting rid of the place promptly with no hassle. If so, I’ll bet you can find all-cash buyers in your own town. That way, you could do a bit of local investigating before you tied the property up in a binding contract.

Comment on Deeds

Q: This is in response to your answer to the man who wanted to make his daughter co-owner of his house. In Missouri there are so many properties that have been in families for generations with informal agreements after an owner dies. As a result, these properties are difficult to sell. Many people are recommending the use of a beneficiary deed to transfer property when an owner dies. The deed should be registered, and, as I understand it, all that’s needed to get ownership transferred is a death certificate. — G.

A: That’s a helpful suggestion, but only about half the states use beneficiary deeds. The rest don’t. Over the years I’ve learned to be careful because newspapers carry this column in many different states and on the Internet.

Edith Lank will respond personally to any question sent to www.askedith.com or to 240 Hemingway Drive, Rochester NY 14620