Several years after the disastrous recession started, Shelba Carlino saw an opportunity to help homeowners who needed an alternate method of selling their homes. She started Fort Worth Home Buyers in 2010 and she tells all callers that “we buy houses” throughout the Fort Worth area.
“I saw immediately the problems homeowners were having,” said Ms. Carlino, “they lost their job or they needed cash or they were facing a foreclosure situation and the standard method of listing their homes with a realtor wasn’t producing results. The retail market of residential home sales expect the home to be in very good to excellent condition and will be approved by the lending institution of the prospective home buyer. It is a process and it takes time to list a property on the MLS (Multiple Listing Service), show the property to potential house buyers, negotiate a price and terms, hope the buyer’s lending institution approves the buyer’s loan application, and finally close.”
The solution was to remove the obstacles by having Fort Worth Home Buyers become the home buyer. And as real estate investors they buy the house with 100% cash. “The traditional obstacles vanish when we put a house under contract,” stated Ms. Carlino.
First, since they pay cash for the property there is no bank involved in the process. So the whole loan approval process vanishes. Second, they are experienced real estate investors and can make very accurate estimates of repairs after a 30 minute inspection. So there is no need to invite multiple contractors to visit the property and make formal estimates. Third, they usually make a firm offer within 24 hours of inspecting a house, and often immediately after the inspection. The terms are exactly what the seller wants – all cash and as soon as possible. So there may be some negotiation with the price but the terms are simple.
“We always inform the home seller that we are offering a wholesale price,” mentions Ms. Carlino, “we also tell them we are real estate investors and we are looking to add value to the property with upgrades, remodeling, and/or reconfiguring a floorplan. In addition, we are assuming all risks such as a real estate market moving against us and undiscovered damage not seen during the inspection. We also tell the seller that at times we are too busy to rehab a house so we may assign the contract to another real estate investor or house buyer.”
The company buys houses in a variety of scenarios. The seller(s) could be a divorcing couple, a person with a job transfer, or siblings that have inherited a house. Regardless, the goal is a fast transaction aided by cash.
The ironic part of the entire process is that after the company has upgraded or remodeled the property (a rehab) they sell it by traditional means – by listing the property on the MLS with a realtor.