Colorado Real Estate Tips & Tricks

Read This Before You Sell Your House for Cash in Denver, the Front Range or Anywhere in Colorado.

COLORADO REAL ESTATE TIPS & TRICKS

DENVER, COLORADO: On the surface, fast-cash companies in Denver and Colorado real estate may not have the most pristine reputation, but you’re not crazy to consider selling your house for cash. As a rising number of companies provide cash offers for Colorado homes and improve experiences for sellers with advanced technology, the idea that you don’t have to wait months to list and close on your house appeals to many stressed-out sellers. A divorce, job move, or low bank account can all be strong motivators to go for the speed and convenience of a cash sale.

Selling for cash in Denver and Colorado.

You want to sell for cash but who pays cash for houses? And what is the advantage to them and why pay cash for houses in Colorado?

“You make a phone call or answer some questions online, agree to an offer, and then it’s not something you have to worry about anymore,” says Doug Van Soest, owner of a house flipping company in Southern California, in describing the typical way things go. “Plus, you’ll save money on things like commissions, repairs, and closing costs.”

Need a cash offer in Colorado? Watson Buys can provide one for you.

When you sell through our Simple Sale platform, you don’t have to worry about additional repairs, prepping your home for listing, or showings.

Request Cash Offer in Colorado

If it all sounds too good to be true or you’re unclear about what selling for cash is really like, we’re here to help walk you through the most common questions and points of confusion:

What does it mean to sell your house for cash in Colorado?

Are Colorado cash-for home companies legit?

Who will purchase your home for cash in Colorado?

Why would someone sell their Denver, CO house for cash?

What value does a Colorado cash buyer provide?

How much do cash buyers pay?

How long does it take for a cash buyer to close in Colorado

Is selling for cash worth it in Colorado?

What does it mean to sell your house for cash?

Selling your house for cash has similar benefits to trading in your old vehicle to the dealership when you buy a new car. Sure, you might pocket a little more money if you sold it yourself. But it would likely take longer — and require extra work on your end. You’d have to make minor repairs, advertise it on Craigslist, organize test drives for potential buyers, and handle all the paperwork yourself.

Translating that to real estate terms, selling a house for cash in Colorado goes something like this:

Request an offer: You skip the staging and showing process and go straight to requesting an offer. At this point you can communicate whether you’re selling “as is” — meaning you don’t intend to make repairs or change anything about the house — or if you’re open to making any repairs.

Colorado House is evaluated: The buyer will collect some information about the home, possibly send a representative to do an onsite visit to the property, and determine what they’re willing to pay.

Review the contract: You as the seller then review the offer, including the contract price and terms, and decide whether to accept.

Ask for proof of funds: You should always obtain documentation that a person or company in Colorado is who they say they are and actually has the funds and abilities to complete a transaction of this size.

Complete inspections: If the deal moves forward, the cash buyer in Colorado may still perform steps like the inspection and appraisal — it all depends on who you work with and how they operate. Even if you’re selling “as is”, an inspection could still be required.

Fast-forward to closing: Without a lender’s involvement, there will be no lender-ordered appraisal or loan processing period in Colorado. As of June 2021 the average home closing where the buyer used a mortgage took 51 days, according to a report from Ice Mortgage Technologies.

Clear title: The CO cash buyer will require a title search to make sure that you can convey the property free and clear of any claims or judgments against the property, such as mechanic’s liens, unpaid taxes, or boundary encroachments.

You get paid! The Colorado cash buyer will likely wire the funds over to your bank account in a process that all in all may take only a matter of weeks or even days.

In summary, selling for cash in Colorado won’t mean that a person shows up on your doorstep with a briefcase full of hundred-dollar bills. You’ll still have official steps to complete and hiccups like a title defect can still arise. But when your Colorado buyer doesn’t have to wait for the lender to underwrite or process their loan, you can usually coordinate a much faster sale.

Are Colorado cash-for home companies legit?

In short, the answer is yes; there are many legitimate companies out there that purchase homes for cash, will provide you with a great experience, and are good on their word. However, we always recommend that you do your due diligence on any buyer before you provide any sensitive information, sign a contract, or send any money.

Check their BBB rating

No matter what type of house-buying company you decide to work with, make sure it’s an accredited Better Business Bureau (BBB) member in Colorado. Check for positive reviews and timely responses to complaints. (Watson Buys , which provides cash offers through our Simple Sale platform, has more than 500 BBB reviews with an average 5-star rating.)

Ask for proof of funds and EMD

Shaun Simpson, a leading real estate agent based in Columbus, Ohio who’s helped a number of clients navigate cash sales, advises asking for official proof of funds from the buyer’s bank and confirming that they can provide adequate earnest money, the deposit that represents a buyer’s commitment to a sale. “If you’re buying a $500,000 house that’s supposed to close in a week, you should have no problem putting a 2-3% deposit into earnest money,” he says.

Consult an agent where needed

An established real estate agent in Colorado will likely have the inside track on who’s who in the local cash buyer market and can also help you avoid getting lowballed.

“There are a lot of investors that are reaching out directly to homeowners in Colorado to try and buy their property with cash,” notes Brian Breeckner, a top-selling real estate agent who, like Simpson, is based in Columbus, Ohio. “To make sure a buyer is legitimate, or that they’re making a good offer based on the value of your home, you can always speak to an experienced local real estate agent and get their opinion.”

What about ‘We Buy Houses in Colorado?”

You’ve probably seen ads for “We Buy Houses in Colorado — so are they legit? If you connect with any one of the company’s bonafide 1,150 franchises in 47 states and 170 markets across the country, the answer is yes. The company, which specializes in flipping dilapidated homes, has bought more than 100,000 houses and is well-established in the cash buying space.

But like you would any other cash buyer in Colorado, do some digging before working with any investor operating under this brand known for their shaggy-haired caveman and yellow billboards. For more details on this particular company, we’ve put together an entire guide on the history of the We Buy Ugly Houses® business.

A house flipper working on a house he purchased for cash.

Who will purchase your home for cash in Colorado?

As a group, cash buyers in Colorado or house buying companies in Colorado are individuals or entities that buy your house outright and all at once, without the need for lender financing. In general, selling your home to a cash buyer typically allows you to skip the home prep, showings, and staging hassles and arrange a more flexible closing timeline to coordinate with the purchase of your next residence. But not all cash buyers have the same exact business model. To keep it simple, we’ve grouped these buyers into a few broader categories you’re likely to encounter today.

Buy and hold investors in Colorado

Buy-and-hold investors purchase Denver and Colorado homes and convert them into rental properties. Sometimes, these buyers sell a property in Colorado once it appreciates enough. Other times, they hold on to it indefinitely.

Within this category, you have individual investors who buy and rent out properties in Colorado for passive income. On a larger scale, there are institutional investors that purchase a minimum of 10 rental properties per year, the quintessential example being Invitation Homes, a subsidiary of Blackstone that operates in 16 markets across America.

In Q2 2021, institutional investors were responsible for 4.6% of all single-family home and condo purchases, the highest level since the end of 2015, according to ATTOM Data Solutions.

When you sell to a buy-and-hold investor in Colorado, you have more flexible closing dates and will likely get better pricing than if you were to sell to a house flipper.

House flippers in Colorado

Perhaps media darlings Chip and Joanna Gaines or your remodeling-enthusiast uncle come to mind when you see the phrase “house flippers.” Whether a small mom-and-pop operation or a larger business, flippers buy homes in Colorado — often in poorer condition and at a lower price — with the intention of renovating them and reselling them for more.

“The minimum return on investment varies depending on things like the market and the condition of the home, but typically we need at least a 10% return on a purchase to make it worth the risk,” says Van Soest.

He adds that while flippers in Colorado usually want to renovate their purchase and resell it as fast as possible, the actual time it takes to get a home ready to list can vary. In the current hot sellers’ market, for example, contractors and subcontractors are extremely busy, so it’s taking twice as long to fix up the typical home. Van Soest is okay with this because home prices are still rising.

ATTOM Data Solutions reports that in the first quarter of 2021, 32,526 homes and condos were flipped. Nationally, the number of flipped homes purchased with cash was 59.2%.

Why would someone sell their Colorado house for cash?

Speed, convenience, peace of mind, and financial motivations top the list of reasons a growing number of sellers are turning to cash buyers in Denver, Colorado, says Van Soest. Here’s how each one of these motivations could apply to your situation.

Certainty

You’re moving for a job and have to be there by a certain date.

You’d rather not deal with the risk of a low appraisal.

You don’t have the time to hire contractors and make major repairs.

You’re nervous accepting an offer with tons of contingencies.

Speed and convenience

You inherited a house you’re unfamiliar with and perhaps far away from.

You don’t want to disrupt your life with house prep, staging, and showings.

You have a problematic or occupied rental property.

Finances

You need cash for a down payment on your dream home.

You don’t have the funds to make necessary repairs.

You’re on the brink of foreclosure.

You need cash to get out of debt.

What value does a cash buyer provide in Colorado?

In other words, what do you get out of working with a buyer who pays cash that you wouldn’t receive otherwise? We lay out the main benefits of this type of deal below.

Faster closing

If your buyer in Colorado has to borrow money, they — and you — are on the lender’s timeline, which is often at least six weeks. All-cash purchases close quickly because lenders aren’t part of the picture. What’s more, a cash buyer’s offer won’t hinge on your home appraising at a certain amount. Real estate transaction data from 2021 shows that appraised values and contract prices are increasingly misaligned on the heels of a steep run-up in home prices.

Flexible move-out

Whether you want to move next week or stay put for a couple of months, a cash sale in Colorado generally gives you plenty of wiggle room. Again, this goes back to the steps you can skip in a cash deal. “With cash, you get a lot of flexibility on your closing date because you’re not waiting on a third party to approve things like a loan or appraisal,” says Simpson.

Lower-maintenance sale

When you request a cash offer in Colorado, you won’t need to worry about keeping your home spotless for weeks or disrupting your schedule for a slew of showings. In addition, you can choose to sell your home “as is” and skip pre-listing projects like roof repairs, painting, and landscaping. How much work you want to put in is really up to you with a cash sale, whereas traditional buyers will have higher expectations about how your home should look.

Reduced expenses

A cash offer in Colorado can cut out many of the usual home-selling expenses including repairs, curb appeal projects, staging, and commissions, acting as a counterbalance to any discount you may receive on price. Our analysis shows that selling a home the traditional way costs an average of $31,000.

What are the downsides of selling for cash in Colorado?

If what you’ve read so far has sold you on the idea of selling for cash, great! But it’s important to understand the downsides before rushing into a cash sale.

Lower price

The trade-off for a faster, hassle-free sale is often getting less money for your home in Colorado. How much less depends on many factors, including the type of buyer you’re selling to, your location, and the condition of your home. Even though it’s becoming more common for iBuyers to make competitive offers on homes, their fees will still cut into your profit.

Not totally off the hook for repairs

One of the biggest lures of selling to a cash buyer in Colorado is that handling pesky repairs lands on their plate, not yours. While you won’t have to pay for repairs out of pocket, you may have to settle for a lower price on your home in Colorado. In most cases, a house-buying company calculates how much it will need to spend on repairs before finalizing your offer and deducts that cost from their offer.

Harder to negotiate

When you list your house in Colorado on the open market, you’ll likely get bids from multiple buyers. They may already see your place as their new home and imagine themselves living there, which can help you leverage a better price. With cash buyers, there are generally no heart strings to tug — it’s strictly business.

How much do cash buyers pay in Colorado?

Depending on your home’s condition, price point, and location, your house will be a more desirable purchase to certain cash buyers over others. Most real estate buyers in Colorado have a specific “buy box” they use with parameters as to which types of properties are most valuable to them. That means what your home is “worth” will vary, even among buyers who can pay instantly.

Flippers, for example, often use the 70% rule. According to the rule, a flipper in Colorado should pay 70% of the After Repair Value (ARV) of a home. iBuyers pay closer to market value — and, increasingly, match or exceed it — because they target newer homes in good condition. They charge a service fee, though in the current seller’s market, these fees can be even lower.

Buy and hold investors fall somewhere in between flippers and iBuyers. They typically pay more than flippers but less than iBuyers and aim to make between 8 to 12 % on their investment.

“The discounted price someone should expect for a cash sale in Colorado varies significantly,” says Van Soest. “The cleaner the house in Colorado, the better the neighborhood, and the fewer issues a house has, the more likely you’ll get an offer that’s closer to market value. The more problems the buyer has to deal with, the lower the offer will be.”

How long does it take for a cash buyer to close in Colorado?

Getting over that final hurdle to close a traditional sale in Colorado — making sure a buyer’s financing is in order — can be an ordeal. As of June 2021, data from Ice Mortgage Technology shows it took an average 51 days to close a sale with a loan. That’s almost two months of waiting.

Cash buyers in Colorado, on the other hand, are a lot more agile. Typically, a company that buys homes in Colorado for cash will show you proof of funds for the amount they’re willing to offer and can close in as little as a week to 10 days.

Is selling for cash a smart move in Colorado?

If speed, convenience, and certainty are your top priorities, then selling your house in Colorado for cash can be the right choice for you.

“As a seller in Colorado, one of the big things you want to do is eliminate all of the question marks around your sale, and cash can do that,” says Simpson. “Cash is the ultimate poker chip because it gives you a lot of leverage. You just have to know a cash buyer might not have the same pain points a traditional buyer has when it comes to negotiating.”

One thing is certain: Companies that buy homes in Colorado for cash aren’t going anywhere. And they are becoming more popular with a variety of sellers, not just those in distress.

“In my opinion, iBuyers and other cash buying companies in Colorado will continue to become more mainstream,” says Van Soest. “Technology is making it easier and easier to sell a home virtually. Things like COVID-19 also impacted sellers’ willingness to sell to iBuyers because it eliminates the need for lots of direct contact.” And, he adds, if your house is in really good condition and in a desirable area, you may get a better price than you think.

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