How Much Will We Buy Houses Companies in New Jersey Pay?
Have you ever wondered how much will we buy houses companies in New Jersey pay? Well, we are here to give you some insight on how We buy houses Companies in New Jersey buy houses.
Most of we buy houses companies in New Jersey use the general rule of thumb called 70% rule to scout potential real estate investments. The 70% rule basically states that a real estate investor should pay no more than 70% of a property’s after-repair-value (ARV) minus the cost of the renovation need to bring the property to sell at market value.
After Repair Value (ARV)
The ARV is the estimated value of a house after the renovations are completed, not its current condition. An investor will research recently sold homes that were renovated in the area to determine the ARV. This is called running real estate comparable or comps.
Comps are used to determine the value of a home by comparing it to similar houses sold in that same neighborhood or area as close as possible. A great comp is a property that is identical to the subject property on the same street, style, square foot, beds, baths, etc. If an investor does not find comps on the same street, they will expand their search no more than1 square mile.
We Buy Houses in New Jersey Project Breakdown
On a New Jersey home that is worth $300,000 renovated the investor’s all-in cost would be $210,000. If the renovation costs are $60,000 the investor would offer $150,000. $90,000 is not want the investor will walk away with.
Based on 6 months from buying, remodeling, and selling
This is just an estimate of what an investor will work away with. Numbers may vary.
Real estate broker fee 5%= $15,000
Property Tax: $3,000
Closing agent: $1,800
State, Recording, Transfer Tax: $1,500
Title Insurance: $1,190
Property Insurance: $900.00
Profit: $65,410 not to mention short-term capital gains taxation
After everything the investor is looking a $51,019.80
Does We Buy Houses Lowball?
Now a lot of realtors and third-party agencies will say a We Buy Houses company will give you a low-ball offer and your house is worth $300,000. If your house is outdated and needs repairs, I hate to say it, but your house is not worth $300,000.
Is houses A worth the same as houses B?
Would you pay the same for living room A as you would for living room B?
At the end of the day, the current real estate market and the condition of a property determine what an investor can pay for a house. We are in the business of giving a fair offer that creates a win-win situation. We will not give you an offer and not be able to justify our offer with comps.
On The Flip Side
If you have the money for the renovations, the time, and the patience it would be in your best interest to fix and flip your property and sell It for $300,000. If you are willing to take on the flipping challenge, I would say try to sell your house For Sale By Owner (FSBO) and save the $15,000 in realtor commissions.
We Buy Houses In New Jersey
If this seems too stressful or too time-consuming, we at Garden State Cash Homes, we buy houses for cash in New Jersey and would love to give you an offer to buy your property as-is.
Call (732)-372-0940 or fill out our online form today to see who we can help you with your real estate needs.