Today we’re going to talk about the differences between selling your house to a wholesaler vs a local cash home buyer in Orlando. Not all home buying companies in Central Florida operate the same way, so it’s important to know whether the company you’re dealing with is a wholesaler vs a local cash home buyer.
Not All Home Buying Companies Are the Same
If you’re looking around on the internet for different companies to buy your house for cash in the Orlando area, you’re probably thinking they all look the same and they all offer the same things. They all promise to buy your house for cash, buy your house as-is with no repairs needed, and close quickly.
All of the offerings may seem like they’re the same, but there is a very important difference between selling your house to a wholesaler vs a local cash home buyer in Orlando.Matt, My Florida Home Buyers
What Is a Cash Home Buyer?
At My Florida Home Buyers, we are actual cash home buyers. That means that we have our own cash that we can use to actually purchase your house. We will close on your house and take title to your house ourselves. We can usually close in 7 to 14 days, unless there are issues with the title work. We’ll buy your house in its current condition, and we’ll pay you cash. We can do all of that because we actually have our own cash and we can actually close on your house ourselves.
You’re probably thinking, “Isn’t that what all home buying companies do?”
No, and that’s why it’s important to understand the differences between selling your house to a wholesaler vs a local cash home buyer in Orlando.
Not every company that claims that they can buy your house for cash actually has the cash to buy your house. That’s the major difference between a wholesaler vs a local cash home buyer.Matt, My Florida Home Buyers
What Is a Wholesaler?
A wholesaler will typically offer the same things as a cash home buyer. They’ll offer to buy your house for cash, close quickly, buy your house as-is, and pay all of your closing costs. They look the same as every other cash home buyer when you’re searching online.
However, a wholesaler doesn’t actually plan to close on your house.
Instead, they will put your house under contract and then try to find a cash home buyer or investor to actually close on the sale. If the wholesaler finds a buyer who has cash and is willing to purchase the house, they’ll assign the purchase contract to that buyer and collect an assignment fee. The actual cash buyer then closes on the house and takes the title, and the wholesaler walks away with their assignment fee.
Not All Wholesalers Are Bad
I want to make it abundantly clear that not all wholesalers are bad. There are a lot of great wholesalers out there, like the wholesaler who sold us this house in Orlando.
This isn’t about bashing wholesalers. This is about informing you that the home buying company you work with to sell your house in Orlando could be operating in two different ways. They could be a wholesaler vs a local cash home buyer.
We Just Bought This House From a Wholesaler
We actually just bought this house from a wholesaler in Orlando, so it’s a perfect case study of the differences between selling your house to a wholesaler vs a local cash home buyer.
In this case, the wholesaler but the house under contract with the people who inherited it. His contract with them was for $150,000, and the contract contained a clause that allowed him to assign the contract to another buyer.
Instead of closing on the house himself, the wholesaler reached out to us because he knows that we’re actual cash home buyers and we have the cash to close. He offered the house to us for $175,000.
After looking at the house and estimating the costs of the repairs and upgrades needed, we agreed to buy the house for the wholesaler’s asking price of $175,000.
This is exactly what wholesalers do. When he offered to sell us the house for $175,000, he didn’t actually own the house. All he had was a contract with the sellers for $150,000.
A wholesaler is basically just someone who flips a purchase contract to a cash buyer and collects an assignment fee.Matt, My Florida Home Buyers
So, to recap, the wholesaler signed a contract with the sellers for $150,000, then assigned the contract to us for $175,000.
At the closing table, the wholesaler signed the paperwork to purchase the house from the sellers for $150,000 and then immediately signed the paperwork to sell the house to us for $175,000. Our money was the money that was wired to the seller. They collected their $150,000, the wholesaler collected his $25,000, and we ended up with the title to the house.
The sellers most likely have no idea what actually happened. They probably think that the wholesaler bought their house for $150,000. Unless they go back and look at the property records they’ll never know.
So, you’re probably thinking, “Why didn’t the sellers just sell the house directly to My Florida Home Buyers for $175,000?”
That leads us to the reasons why selling your house to a wholesaler vs a local cash home buyer in Orlando might not be the best option for you. There are actually two big reasons to sell your house to a local cash home buyer.
Local Cash Home Buyers in Orlando Can Usually Pay More Money for Your House Than a Wholesaler
When you contact an actual cash home buyer to sell your house instead of a wholesaler, you’re cutting out the middleman and selling your house directly to the end buyer. You’ll essentially be saving yourself the assignment fee that the wholesaler charges the cash home buyer. In the case mentioned above, that assignment fee was $25,000 which is a substantial amount of money.
Getting more money from the sale is the obvious reason to choose a local cash home buyer over a wholesaler. But, there is another big reason to be wary of wholesalers.
Local Cash Home Buyers in Orlando Can Offer You a Guaranteed Closing on Your House
Because wholesaling is often taught by real estate gurus as a way to make money in real estate without any of your own money, it tends to attract a lot of beginner real estate investors. When you hear real estate seminars advertising ways to become a millionaire in real estate investing without any of your own money, many times they’re talking about wholesaling.
The result is an abundance of beginner wholesalers who promise to pay you cash and close on your house quickly, who are then unable to find a buyer for the contract.
This is a major issue that we see often. If they’re unable to find a buyer for the contract in time or come up with their own money, a wholesaler cannot close on the sale of your house.Matt, My Florida Home Buyers
If a wholesaler is unable to find a buyer for your house who they can assign the contract to, they’ll typically do two things. They’ll ask you for more time to close and they’ll ask for a price reduction.
This isn’t ideal for you as the seller. You may have been counting on the closing happening by a specific date, and you’re obviously not going to be thrilled about a price reduction.
If you sell to an actual, local cash home buyer, like My Florida Home Buyers, you get a guaranteed closing and an offer price that will not change.Matt, My Florida Home Buyers
Not being able to offer a guaranteed closing is really the biggest problem with wholesaling. When sellers reach out to a home buying company, they’re expecting a guaranteed offer and closing that will solve their real estate problem.
We’re contacted on a regular basis by sellers who were previously working with a wholesaler who ended up backing out of the contract. These sellers often needed to sell quickly in the first place, and now they’re left with even less time to get their house sold.
Ready to Sell Your House to an Actual, Local Cash Home Buyer in Orlando?
At My Florida Home Buyers, we offer you a guaranteed closing. We have access to our own cash, and we can actually close on your house. It’s a guaranteed closing, and we’ll put money in escrow to prove it. We can even give you proof of funds to make you feel more comfortable. We’ve never backed out of a contract to purchase a house, and that’s really the difference between dealing with us and dealing with a wholesaler in Orlando.
Most home buying companies in the Orlando area and in Central Florida are wholesalers. Very few of the companies that operate in this area actually have their own cash and intend on closing on the house themselves.
When you’re looking online and do a Google search for “we buy houses Orlando“, most of the companies that pop up are not going to be actual cash home buyers. Most of them will be wholesalers.
Contact My Florida Home Buyers for a Guaranteed Cash Offer on Your House Today
I hope this has cleared up some of your questions and makes the process of selling your house to a cash home buyer a little more transparent so that you can see what goes on behind the scenes in this industry.
If you have a house to sell in Orlando, whether you need to sell your house fast, or whether you inherited a house, whatever the case may be, contact us today for a guaranteed cash offer on your house. We’re actual cash home buyers! We’ll come out and take a look at your house. We’ll give you a guaranteed closing on an actual closing date and we’ll buy your house from you. We’ll pay you all cash and you don’t have to make any repairs.
If you need to stay in the house after closing for a period of time, we can accommodate that as well in order to make the transition to your next home as seamless as possible.
If we can help you out in any way, please give us a call or submit your property information below and we will see if it’s something that we can help you out with.