Thinking about selling your home for cash in Kansas City? Read this first
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Kansas City’s East Side land grab
A 2021 Star investigation looks into how a neglected section of the city has become a hunting ground for real estate speculators and why many Black residents feel they are once again being exploited and left behind.
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It’s no secret to homeowners that the Kansas City metro area has been experiencing a surge in offers to buy houses for cash. The issue is especially prevalent on the East Side, according to a new investigation from The Star.
Quick cash purchases can sound appealing to homeowners looking to pay off debt or relocate quickly. But the convenience of these deals comes at a cost: a much lower sale price for your house. Critics of cash purchases also say that when the sales lead to quick house flipping, they can drive up property values and taxes, which can be disastrous for neighborhoods’ long-time residents.
We’ve heard from readers wondering what to do about these persistent offers to buy. Here’s what local experts recommend.
Why am I getting so many offers to buy my house?
Data shows that the median sale price of a single-family home is rising in Kansas City and the surrounding area. Investors see local real estate as a money-making opportunity — but they want to buy property as quickly and cheaply as possible.
For this reason, many Kansas City residents have been receiving a barrage of phone calls, text messages, paper mail and even in-person visits from investors hoping to buy their homes with cash. You may have also seen signs or flyers in your neighborhood with similar offers.
Who is buying houses for cash in Kansas City?
A new report by The Star shows that investors from all 50 states and a handful of foreign countries are purchasing homes in Kansas City. The vast majority of those buyers don’t plan to actually live in the houses they purchase. Instead, they often hope to renovate them and either rent or resell them at a higher price.
Because many of the investors buying homes in the area are limited liability corporations, or LLCs, it’s often difficult to tell who exactly is offering to purchase your home. Some LLCs are not required to disclose who owns or manages them.
Do I have to sell my house?
No. Nobody can force you to sell your house if you don’t want to sell it. The only entities that can take possession of your house are your mortgage lender if you fail to make the proper payments, or the county if you fall into tax foreclosure.
“If [homeowners] are getting robo-calls and texts and they haven’t done anything to ask for them… I would ask them to stop,” said Kim Tucker, executive director of the Mid-America Association of Real Estate Investors. “They shouldn’t be cold calling you, or texting you out of the blue.”
Pro tip: You can also ask callers to add you to their Do Not Call List.
Have prospective home buyers persistently continued to contact you after you asked them to stop? The Star wants to know about it. Tell the Service Journalism team about your experience by emailing kcq@kcstar.com or filling out the form at the end of this story.
Is now a good time to sell my house?
Housing prices are high right now — both for sellers and for buyers. If you are already planning to downsize, start renting or move somewhere new, now is a great time to sell your house. But if you’re hoping to buy a new home, it won’t be cheap.
“Is it a good time to sell? Absolutely,” said Tony Conant, president of the Kansas City Regional Association of Realtors. “They’ll get top dollar for selling their house right now, but if they’re going to buy again, they’re probably going to have to turn around and pay almost top dollar to get the same thing that they had.”
The decision to sell a house is dependent on a bunch of circumstances. What’s most important, Conant says, is taking all your options into account before making that big decision.
Here are a few factors to keep in mind.
What are the advantages to selling my house for cash?
If you own property in Kansas City and want to sell it quickly, a cash deal might suit your needs. These sales offer a few qualities that homeowners may find appealing:
Speed: Cash sales are fast because they often don’t involve the same appraisals, inspections, or tours as a traditional home sale.
Logistics: Cash sales don’t require homeowners to hire a Realtor or find a new buyer who actually wants to live in their home. Buyers offering cash also bypass the complicated mortgage process, leading some to see them as more reliable.
Convenience: Homeowners who don’t live in Kansas City may be drawn to quick cash deals because they are easy to handle over the phone and online.
Condition: Homes in poor condition may be difficult to sell on the open housing market. Taking cash for them instead allows the owner to avoid costly repairs.
The takeaway: Quick cash deals have some limited advantages, especially for property owners who don’t live in the area and are looking to sell quickly with minimal hassle.
What are the disadvantages to selling my house for cash?
If you live in the house you own, selling it is a big decision that real estate agents say shouldn’t be rushed. Here are some of the ways a quick cash deal can prove inferior to a traditional sale:
Price: Cash buyers frequently offer prices 20-30% lower than a home’s true market value, says Conant. If sellers want a quick and easy cash deal, they often have to settle for less money than they may have gotten in a traditional sale. Since a house is one of the most expensive things most people own, this can create a significant impact on a family’s generational wealth.
Local knowledge: Tucker recommends researching real estate investors extensively before entering into a cash deal with them: “Have they been doing this for 20 years with the knowledge and connections to actually do what they say?” If not, they may back out of a deal unexpectedly or not actually have the cash they offered.
Offer changes: Cash-for-houses operations are less likely to tour homes in person, which Tucker says makes their offers more subject to change. “Many out-of-state buyers get the house under contract, then they do their inspections, and then they drastically change their price to make repairs that they should have seen when they walked through it,” she said. “[That’s why] I don’t take sight unseen offers.”
Neighborhood impacts: The transfer of property from residents to large corporations is raising the cost of living in many Kansas City communities, according to The Star’s reporting. The issue is especially prevalent east of Troost Avenue. Listing your home on the open housing market gives you a better chance of selling it to a buyer who will actually live in your neighborhood.
The takeaway: Quick cash deals often get sellers less money than a traditional home sale, and often put property in the hands of corporations with little or no local connection. For these reasons, a traditional home sale may make more sense for many Kansas City residents.
How can I explore my options?
Selling your house is a big decision, and real estate agents recommend exploring your options before committing to a deal. Even if you end up accepting a cash offer, comparison shopping will help you better understand the value of your home and who may be purchasing it.
“It doesn’t cost you anything to have the cash buyer come look at your house and make you an offer,” said Tucker. “Then you can sit on that offer and do your homework and make sure it’s legitimate, and then go see what a Realtor will charge you and compare the two.”
Habitat for Humanity of Kansas City offers home ownership counseling to city residents. Neighborhood Housing Services of Kansas City is another local nonprofit that can help you discuss your options before selling your house. Conant added that most Realtors will not charge anything for consultations or a conversation about your options.
“I don’t know of any Realtor that charges for that whatsoever,” he said. “Take your time, weigh all your options… and consider what’s going to be best for you in the long run.”
Do you have more questions about cash-for-houses operations or other real estate issues in Kansas City? Ask our Service Journalism team at kcq@kcstar.com or fill out the form below.
This story was originally published December 12, 2021 at 5:00 AM.
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