HomeVestors Reviews: A Comprehensive Analysis
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Have you ever driven down the street of a city neighborhood and seen a small sign that reads, “We Buy Ugly Houses”? Most of us have seen the signs and haven’t thought much of it. Who sells their home to a company that puts up posters?
Well, a large franchisor parent company is the backbone of the “We Buy Ugly Houses” signs and billboards called HomeVestors. In fact, the company is one of the biggest cash buyer companies in the country, servicing 45 states and the District of Columbia.
Before picking up the phone to call HomeVestors, deciding whether working with them is a good idea or the right fit for your transaction is best.
We’ve done the hard homework for you and analyzed HomeVestors reviews and service. Our comprehensive analysis provides the necessary insights to determine if HomeVestors is a suitable choice or if you should just start your search for a real estate agent.
What Is HomeVestors?
HomeVestors of America is a prominent cash-buying real estate business, commonly known as the “We Buy Ugly Houses” company. Founded in 1989 and franchised since 1996, the company has become a significant player in the real estate investment sector. HomeVestors specializes in buying houses needing repair or renovation and houses from owners who require a faster sale than typically possible through a traditional realtor. Their services include buying, rehabbing, and selling or renting these properties.
The company operates on a franchise model, with over 1,000 franchises, allowing it to have a broad reach in the real estate market. Each franchise is independently owned and operated, resulting in varied customer experiences and operational methods from one franchise to another. Just because a customer had a great experience in Dallas doesn’t mean you will have that same experience in Austin.
HomeVestors isn’t for every home or every seller. The company primarily targets homes that are difficult to sell in the conventional market. This includes properties that require extensive repairs, homes in less desirable neighborhoods, or situations where the owner needs to sell quickly, often due to financial or personal reasons.
The company’s business model is centered around purchasing homes at a lower price point, refurbishing them, and then either selling or leasing them. Think of them as a house-flipping model. They market their business philosophy as being beneficial to neighborhoods, helping them improve, and providing opportunities for first-time homebuyers and renters.
A key aspect of HomeVestors’ business model and value proposition is the ability to make quick cash offers. This is particularly appealing for sellers looking for a fast transaction, although it often comes at the cost of selling below the market value. Sellers who choose to work with HomeVestors usually get the benefit of a quick sale and minimal contingencies but have to sacrifice on sale price.
How Does HomeVestors Work?
Selling a home through HomeVestors is usually easier and faster than listing with an agent. There is no inspection or finance contingency, and as a bonus, minimal paperwork for the seller. Homes can be sold in a matter of days or at the date of the seller’s choosing.
Let’s walk through the HomeVestor’s sale process and then dive into how this company earns a profit.
Step One: Initial Contact from “We Buy Ugly Houses” Marketing
It’s common for owners who sell to HomeVestors to have had their property listed For Sale By Owner (FSBO) for some time before connecting with HomeVestors. The process with HomeVestors typically begins when a homeowner contacts them, often in response to their marketing efforts like the “We Buy Ugly Houses” advertisements.
Homeowners might also reach out through the company’s website or by calling a local franchise office. When making initial contact, you will be connected with a local franchisee.
The HomeVestors property specialist will ask questions about the property and schedule an in-person tour.
Step Two: Property Evaluation
Once contact is made, HomeVestors schedules an appointment to evaluate the property. This inspection involves a representative from a local franchise visiting the home to assess its condition and determine any necessary repairs or renovations. They might bring a contractor or other advisor to look for significant property defects and advise on repair costs.
The home evaluation is how the franchise assesses the property’s fair market value and determines how much it needs invested to create a profitable asset.
Remember, HomeVestors franchises are property investors whose mission is to make money from selling or renting the property ultimately. After they perform their due diligence, including checking ownership and that the property has a clear title, they determine an offer price.
Step Three: Recieve an Offer!
Unless the HomeVestor franchisee believes your property is too risky (very rare), you’ll receive a written offer price based on their initial evaluation. HomeVestor offers are cash offers, which means there are no contingencies, and the sales usually have a quick escrow.
Their offer is almost always below the market value of the home, reflecting the company’s business model of buying at a lower price. The homeowner can then choose to accept or reject the offer. If they reject the offer, the sale process ends here. However, the seller can expect future sale calls and marketing materials from HomeVestors.
While sellers can attempt to negotiate a higher price, HomeVestors will rarely purchase a property at fair market value.
Step Four: Closing
If the homeowner accepts the offer, HomeVestors proceeds with the closing process. The company prides itself on quick closings, often able to finalize the sale within a few weeks. Closing can happen quickly as long as the property’s title is clear or can be cleared with a loan payoff. This speed is a significant advantage for homeowners needing to sell quickly.
Upon closing, the homeowner receives a cash payment for their property. HomeVestors takes over ownership, handling all the paperwork and closing costs.
What Do HomeVestors Do After the Sale?
After purchasing a home, HomeVestors typically renovates the property. The extent of these renovations can vary, but the aim is to improve the home’s condition for resale or rental. Once renovations are complete, the property is either sold or rented out, contributing to neighborhood revitalization.
HomeVestors are property flippers and investors. They improve properties and then either hold them long-term as rental properties or resell them for a profit.
Is Homevestors Legit?
While every franchise can vary, HomeVestors is generally recognized as a legitimate cash-buying brand. HomeVestors has been recognized for its growth and franchise model, being named as one of the top 50 franchises in recent years. This growth is a testament to the demand for the services they offer and their success in the real estate investment market.
The company is fast-growing, and because it’s a franchise model, you need to trust not only the brand but also the franchisee with whom you work. While HomeVestors has a proven record of removing unethical franchisees, it’s still crucial that you do your due diligence before signing up for their service.
Remember that sellers working with HomeVestors will likely not get fair market value for their homes. HomeVestors’ business model stems from purchasing properties below market value and adding value to sell or rent them for a profit.
Throughout the process, HomeVestors emphasizes that their offers come with no obligation for the homeowner to accept. They are transparent about their intention to profit through the eventual resale or rental of the property.
HomeVestors Reviews on Better Business Bureau
The reviews of HomeVestors on the Better Business Bureau indicate a lot of frustration with this company, both from those who have used their services and those who receive their marketing.
Many complain of being “harassed” by their marketing techniques, which involve consistent mailers in the form of letters and postcards. Others feel that the company targets the elderly, infirm, and those faced with financial hardship. Because owners do not receive an offer close to a fair price, many reviewers claim HomeVestors is exploiting those who are less fortunate.
HomeVestors’ marketing directly targets distressed properties, which are often held by owners who don’t have the financial means to make necessary repairs. Often, franchisees send mail marketing to addresses in a targeted zip code or to owners who have received a notice of default. A notice of default is sent to all property owners who fall behind on their mortgages. This notice becomes a matter of public record, resulting in the property becoming a target for investors like HomeVestors.
While some reviews commend their franchisee for helping them out of a difficult situation and getting a property sold quickly, most HomeVestors reviews are negative.
HomeVestors reviews confirm that the service is really meant for properties that can’t be sold at market value due to disrepair, that need to be sold quickly, or that can’t get traditional financing. Don’t expect a fair market offer if you want to sell your home to HomeVestors for a cash offer. To get the most money from your home, it’s best to work with a traditional real estate agent and listing on the open market.
Pros and Cons of Using HomeVestors
When considering selling your property to HomeVestors, it’s crucial to weigh the advantages and disadvantages of their unique approach to real estate transactions. Known for their slogan “We Buy Ugly Houses,” HomeVestors offers a service that seems to solve many common problems home sellers face but at a price.
We’ve analyzed HomeVestors reviews and compiled an objective list of the pros and cons of selling your home to this company.
Pros of Using HomeVestors
While you aren’t going to get top dollar if you sell your property to HomeVestors, there are some positives to working with them. Positive HomeVestors reviews mention:
- A Quick Sale Process
Many customers appreciate HomeVestors for their ability to close sales quickly, often in a matter of weeks. Sellers who need to sell their homes urgently due to financial constraints, relocation, or other personal reasons value this service. - Cash Offers
HomeVestors makes cash offers. A cash offer leads to a straightforward and less complicated transaction than dealing with buyers who require financing. A cash buyer is a guaranteed sale and price without the risk of buyer financing falling through. - Selling ‘As Is’
One of the most notable benefits is that HomeVestors buys homes in any condition. This is ideal for sellers with properties requiring extensive repairs or renovations that they cannot afford or are unwilling to undertake. Is the roof caving in? No problem. The HomeVestor property specialist will account for the cost when they make their offer. - No Need for Listing or Staging
Selling to HomeVestors eliminates the need to list the property, stage it for showings, or market it, which can be time-consuming and costly. The real estate deal is quick and straightforward, which can save money upfront. - A Transparent Process
Several reviews highlight the transparency of the process. HomeVestors franchisees are clear about the business model and the fact that they make cash offers below market value to make a profit on their investment.
Cons of Working with HomeVestors
Based on HomeVestors reviews, there are several downsides to working with them. Negative HomeVestors reviews highlight:
- Below Market Value Offers
A significant drawback noted by many reviewers is that the offers from HomeVestors are often substantially below the property’s market value. While the home selling process may be simple, sellers feel like money was left on the table. - High-Pressure Sales Tactics
To find deals, HomeVestors deploys aggressive marketing and sales techniques. Many reviews stated that potential sellers felt harassed by direct mail advertising and phone calls. HomeVestors are real estate investors hunting for deals. Once property owners express interest in their services, they get bombarded by emails, phone calls, and sometimes in-person visits. Some reviews said that sellers felt pushed into accepting an offer they didn’t consider a fair price. - Variability in Franchise Experiences
Due to the franchise model, the experience and service quality will vary significantly from one franchise to another. One HomeVestors franchisee might have a high level of service, while others are less reputable. - Aggressive Marketing Tactics
Some reviews on the Better Business Bureau and other platforms express concerns over aggressive marketing tactics, including constant mailers and communication, even after declining offers. - Perceived Exploitation of Vulnerable Sellers
There are criticisms that the company targets homeowners in distress, such as the elderly or those facing financial hardship, which some see as exploitative. - Potential for Better Offers Elsewhere
Sellers might find they can get a better deal by listing their property on the open market, especially if their home is in a desirable location or in good condition.
While HomeVestors offers a quick and convenient way to sell properties, especially those in poor condition, there may be better choices for homeowners looking to maximize their sale price. Most cash companies are looking for a deal, which means under-market offers on homes they can profit from.
Alternatives to HomeVestors
Just because you need to sell quickly or can’t afford the repairs on your home doesn’t mean you can’t list your home on the open market. While HomeVestors offers a fast and straightforward solution, it’s not the only route to sell fast. Some alternatives can yield better financial outcomes, even in situations demanding speed or faced with property challenges.
A skilled real estate agent and competitive pricing will almost always provide property owners with a better result than going to a HomeVestor franchise. Alternatively, for an expedited sale, work with an iBuyer like HomeLight.
FastExpert
The traditional home-selling route involves working with a real estate agent. Skilled agents can be instrumental in navigating the complexities of the market and can often secure a better deal than what HomeVestors might offer. Here’s how:
- Right Pricing – Even if a quick sale is needed, an agent can set a competitive price that may generate multiple cash offers.
- Effective Marketing – An agent’s marketing exposes a property to a wider audience and more potential buyers.
- Negotiation Skills – Your agent will negotiate for the best price and terms. When you work with a real estate agent, your best interests are professionally represented.
- Handling Paperwork – Selling a property involves paperwork. Your agent will handle and explain all the sale paperwork so you don’t feel like you’ve missed any details.
Before you contact HomeVestors, connect with a real estate agent with FastExpert to see how they can help you sell your property.
FastExpert makes it easy to find top-performing real estate agents. The user-centric search platform provides the following:
- A Wide Network of Agents
- Access to Personalized Service
- Speed and Efficiency
- Potential for a Higher Selling Price
Like HomeVestors, FastExpert can facilitate a quick sale, but potentially at a better price, as agents vie to get the best deal for your property in a competitive market.
Discount Real Estate Agents
Some sellers choose to work with HomeVestors because they think they are saving money on real estate commissions. If a high commission fee is your concern, consider searching for and working with a discount real estate agent.
Low-commission real estate agents work on a smaller fee percentage. However, many still offer great service. Their service is an excellent alternative to HomeVestors because they have:
- Low Commission Rates
- Market Knowledge and Expertise
- Customizable Service Packages
- Negotiation Skills
The best way to find low-commission real estate agents is through online user-friendly platforms like FastExpert. Additionally, you can explore discount brokerages, which typically charge only 1.5% to sellers.
The downside of discount brokers is that paying a low commission can sometimes be discouraging to buyer’s agents. However, a low-commission offering might not be an issue if your target buyers are real estate investors.
Takeaways
HomeVestor is a legitimate cash-buying company that makes offers on properties significantly below fair market value. To limit risk, HomeVestor has to account for the renovation costs and potential repair value; they need to leave a considerable margin of error to ensure they profit on their investment.
Their services can be helpful to sellers in financial distress or who have properties in very poor condition. However, HomeVestors is known for aggressive marketing and sale strategies that can be distressing to potential sellers.
Sellers who want to maintain more control over the transaction and avoid cash investor sale techniques should instead find a real estate agent who can help them list their property. Often, a property owner makes a higher profit when listing their assets on the MLS. With an open market listing, the property gets exposed to various traditional and cash buyers.
If you want to sell quickly without sacrificing a large portion of your equity, find a real estate agent specializing in distressed properties. FastExpert’s user-centric search platform makes it easy to explore real estate professionals, read verified reviews, and find the right agent to handle your sale.
Don’t leave money on the table. Connect with a real estate agent with FastExpert today.
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