"We Buy Houses"...

Hello all...
Seen these signs around now and then, in various iterations. Sell a house, get cash, quickly.
I'm wondering if there's a formula they use to make their offers, i.e., a certain percentage of market or assessed value?
I realize these are probably "situations of last resort", but could they ever become a realistic "alternative" for a sale, when one can't sell "conventionally"?
I'm thinking, old house, needs LOTS of work, in a declining neighborhood (one literally choking with illegals and illegal "hotels"). No way to get what it _might_ have been worth even 5 years ago. A situation where - if you spend $$$ to fix it up - you'll probably get back 40 cents (or much much less) for every dollar spent. A losing proposition.
Thanks, - John
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you will be lowballed
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"you will be lowballed"
Duh!
Those folks have to make a profit most of the time.
Years ago, I had a property that was listed for $110k. The "quick closers" guys offered $85k and my agent presented me the offer which I refused. A week or so later I got a $105k offer which I refused and then the same buyer met my price. The settlement had a lot of tension as the buyer honestly belived that she was "entitled" to get the place for $105k.
Anyway, that was in a good market and I lived nearby so I could easily lease the place out. There was only a $50k loan on the property so had I been an out of town owner, I might have compared getting $35k RIGHT NOW over MAYBE getting $70k later.
When folks sell homes they have lived in there is often a bit of emotion involved. Sometimes they associate the place with bad memories and want to get out from under ASAP. The quick buyers do that for you.
Another thing folks can consider is holding the offer from the "quick buy" folks and modify the listing agreement so that a sale to the "quick buy" folks would not result in a commission being paid. There are a lot of hungry agents out there so you might still be able to list the property.
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You will be lowballed ALL THE TIME.
Pennies on the dollar.
TMT
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On Fri, 24 Apr 2009 23:56:47 -0400, John Albert wrote:

The industry standard formula for investors is to pay 70% of the after repair value minus repair costs. If after fixing up the place it would be worth $100,000 and requires $20,000 in repairs an investor will offer no more than $50,000 unless they already have a buyer lined up for that house. They will typically sell it for under market value for a quick sale, possibly as low as $85,000-90,000. They may also keep it as rental property.
Mike D.
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