How Do "We Buy Houses" Companies Work? A Step-by-Step Breakdown

You've probably driven past the signs, received the mailers, or seen the ads: "We Buy Houses — Cash — Any Condition — Close Fast." The promise sounds almost too simple. You call a number, someone looks at your house, and you get a check.

But how does it actually work? What happens behind the scenes when real estate companies that buy homes make you an offer? How do they decide what to pay? And what should you expect if you decide to move forward?

This guide walks you through the entire process from start to finish. No hype, no sales pitch — just a clear explanation of how the "as is home buyers" industry operates so you can make an informed decision about your property.

The Business Model Behind Cash Home Buyers

Before walking through the process, it helps to understand why these companies exist and how they make money. The business model is straightforward.

Cash home buyers purchase properties below market value, typically at a discount that accounts for:

• Repair and renovation costs — bringing the property to retail condition
• Holding costs — property taxes, insurance, utilities, and loan interest while renovating
• Transaction costs — closing costs on both the purchase and eventual resale
• Profit margin — the compensation for their time, risk, and capital

This is the same model that house flippers, rental property investors, and real estate investment companies have used for decades. The "We Buy Houses" branding is simply a way to find sellers who prefer speed and convenience over maximum sale price.

The model works because it serves a real market need. Not every homeowner wants to spend months listing, staging, showing, negotiating, and waiting for a financed buyer's mortgage to clear. For sellers in time-sensitive situations — foreclosure, probate, divorce, relocation — the traditional process can cause real financial harm through continued mortgage payments, maintenance costs, and lost time.

Step 1: Initial Contact

The process starts when you reach out to a cash buyer, or when they contact you. Most companies that buy houses generate leads through:

• Direct mail (postcards, letters)
• Online advertising (Google, Facebook)
• Bandit signs (the roadside signs)
• Referrals from attorneys, Realtors, and past sellers
• Public records searches (foreclosure filings, probate cases, tax delinquencies)

When you call or submit a form, the first conversation is usually 10-15 minutes. The company asks basic questions:

• Property address
• Your relationship to the property (owner, heir, executor)
• General condition of the home
• Why you're considering selling
• Your ideal timeline

This isn't an interrogation. A good buyer is trying to understand your situation to determine if they can help. They're also doing a quick mental assessment of whether the property fits their buying criteria.

What you should know: This initial conversation is informational for both sides. You're not committing to anything by calling. You're gathering information, just like the buyer is. Ask them questions too — how long they've been in business, whether they're licensed, and how many homes they've purchased in your area.

Step 2: Property Research

Before ever visiting your home, experienced real estate companies that buy homes do their homework. They pull public records and available data to build a preliminary picture:

• Tax assessor records — assessed value, property taxes owed, lot size, square footage
• Sales history — when the property last sold and for how much
• Comparable sales — what similar homes in the neighborhood have sold for recently
• Lien searches — outstanding mortgages, tax liens, Medicaid liens, judgment liens
• Foreclosure status — whether any default notices or lis pendens have been filed
• Ownership records — deed history, current owner of record, any title issues

This research helps the buyer develop a preliminary value range before visiting the property. It also helps them identify potential complications — like title issues or liens that could affect the transaction.

In Ohio, most of this information is available through county auditor websites and public court records. Hamilton County, Montgomery County, and other SW Ohio counties all have online records portals.

Step 3: Property Walkthrough

Most as is home buyers want to see the property before making a firm offer. This walkthrough is different from a traditional home inspection — it's faster, less formal, and focused on the big-ticket items.

During a typical walkthrough, the buyer assesses:

Structural Elements

• Foundation condition (cracks, settling, water intrusion)
• Roof age and condition
• Load-bearing walls and framing

Major Systems

• HVAC — age, functionality, type (furnace, heat pump, central air)
• Plumbing — pipe material (copper, PEX, galvanized, polybutylene), water heater age
• Electrical — panel amperage, wiring type, any knob-and-tube or aluminum concerns

Cosmetic Condition

• Flooring throughout
• Kitchen and bathroom condition
• Paint, drywall, ceiling condition
• Windows and doors

Environmental Concerns

• Signs of mold or water damage
• Potential asbestos (common in pre-1980 Ohio homes)
• Lead paint indicators (homes built before 1978)

Exterior and Lot

• Siding condition
• Driveway and walkways
• Drainage and grading
• Garage or outbuilding condition

The buyer is mentally calculating repair costs during the walkthrough. A house that needs paint and carpet gets a very different cost estimate than one needing a new roof, HVAC system, and foundation repair.

What you should know: You don't need to clean, repair, or prepare anything for this visit. The buyer expects to see the property as-is. Don't hide problems — experienced buyers will find them anyway, and concealment damages trust. Honest disclosure actually helps you because it eliminates surprises that could derail the deal later.

Step 4: Offer Calculation

This is where the real math happens. How does a "We Buy Houses" company actually determine what to offer you?

The ARV Approach

Most cash buyers use an approach based on the After-Repair Value (ARV) — what the property would sell for if it were fully renovated and in market-ready condition.

To determine ARV, buyers analyze comparable sales (comps):

• Location match — same neighborhood, same school district, similar lot
• Size match — within 200-300 square feet and similar bedroom/bathroom count
• Condition match — recently renovated homes that represent the finished product
• Recency — sales within the last 3-6 months carry the most weight

For example, if three renovated homes on nearby streets in Kettering recently sold for $190,000, $195,000, and $185,000, the buyer estimates an ARV of approximately $190,000.

Repair Cost Estimation

Using their walkthrough notes, the buyer builds a repair budget. Experienced investors in the Dayton and Cincinnati markets have a good sense of local contractor costs:

| Repair | Typical Cost Range (SW Ohio) |

|---|---|

| Full kitchen renovation | $12,000-$25,000 |

| Bathroom remodel | $5,000-$12,000 |

| New roof | $8,000-$15,000 |

| HVAC replacement | $5,000-$10,000 |

| Foundation repair | $5,000-$30,000+ |

| Full interior paint | $3,000-$6,000 |

| New flooring (whole house) | $5,000-$12,000 |

| Electrical panel upgrade | $2,000-$4,000 |

| Plumbing repipe | $4,000-$10,000 |

These costs vary based on the specific property, but experienced buyers in your local market know the going rates.

The Offer Formula

The standard industry formula:

ARV x 70% - Repair Costs - Fees = Maximum Offer

Using our example:

• ARV: $190,000
• 70% of ARV: $133,000
• Estimated repairs: $25,000
• Fees and closing costs: $5,000
• Maximum offer: $103,000

The 70% multiplier accounts for the buyer's profit margin, holding costs during renovation, selling costs (agent commissions when they resell), and risk. Some buyers use 65% for riskier properties or 75% for properties in high-demand areas.

What you should know: Ask the buyer to walk you through their numbers. A transparent buyer will show you the comps they used, their repair estimate, and how they arrived at the offer. If they won't explain their math, that's a red flag. At Hillard Home Solutions, we walk through every number because an informed seller makes better decisions.

Step 5: Offer Presentation and Negotiation

Once the buyer runs their numbers, they present a written offer. This typically includes:

• Purchase price — the amount they'll pay for the property
• Closing timeline — when the transaction will be completed (usually 7-21 days for cash)
• Contingencies — conditions that must be met for the sale to proceed
• Who pays closing costs — most cash buyers cover all closing costs
• Any additional terms — moving assistance, lease-back period, personal property inclusion

At Hillard Home Solutions, our offers include up to $1,200 in moving assistance to help sellers with their transition. We also pay all closing costs, so the offer price is what you actually receive.

Is the Offer Negotiable?

Usually yes, within reason. Cash buyers have built margin into their offers, and many are willing to adjust. However, they have a ceiling — the point where the deal stops making financial sense for them.

The strongest negotiating leverage comes from:

• Having multiple offers from competing buyers
• A clean title with no liens or complications
• Flexibility on the closing timeline (a faster close can be worth more to the buyer)
• A property in a desirable neighborhood where the ARV is strong

Cash Offer vs. Listing Comparison

A good buyer will also help you understand how their cash offer compares to a traditional listing. Here's a realistic comparison for a property with an ARV of $190,000 needing $25,000 in repairs:

| | Cash Sale | Traditional Listing |

|---|---|---|

| Sale price | $103,000 | $165,000 (as-is, discounted) |

| Agent commission (5.5%) | $0 | -$9,075 |

| Seller concessions | $0 | -$3,300 |

| Repair costs | $0 | $0 (sold as-is) or -$25,000 |

| Closing costs | $0 (buyer pays) | -$2,000 |

| 3-4 months carrying costs | $0 | -$4,800 |

| Net to seller | $103,000 | $145,825 (no repairs) |

| Timeline | 7-14 days | 90-120 days |

In this scenario, listing nets significantly more if you have the time. But if the property needs repairs before it can even attract a traditional buyer, or if your timeline doesn't allow for a 3-4 month process, the gap narrows.

Preston Hillard is a licensed Ohio Realtor with eXp Realty, which means he can present both sides — a cash offer today and a listing price estimate — so you see the complete picture. Not many cash buyers offer that dual perspective.

Step 6: Contract and Due Diligence

If you accept the offer, both parties sign a purchase agreement. For cash sales, this contract is typically simpler than a traditional real estate purchase agreement, but it still includes important protections.

Key contract elements to review:

• Inspection contingency — does the buyer have the right to reduce the price after an inspection? Legitimate cash buyers who've already done a thorough walkthrough typically don't include this, or they include a very short window (3-5 days).
• Assignment clause — can the buyer assign (transfer) the contract to someone else? If yes, you may be dealing with a wholesaler rather than a direct buyer. Read our questions to ask a cash home buyer guide for more on this topic.
• Earnest money deposit — a good-faith deposit that shows the buyer is serious. Legitimate buyers put up meaningful earnest money, typically $500-$2,000 or more.
• Closing date — the specific date when the transaction will be completed.
• Default provisions — what happens if either party fails to perform.

What you should know: Never sign a contract you don't understand. Take it home, read it, and have an attorney review it if anything is unclear. A legitimate cash buyer will give you time to review and won't pressure you to sign on the spot.

Step 7: Title Search and Closing Preparation

After the contract is signed, the title company (or closing attorney) gets to work. Their job is to verify that the seller has the legal right to sell the property and to identify any claims against it.

The title search uncovers:

• Mortgage liens — any outstanding mortgages that must be paid from the sale proceeds
• Tax liens — unpaid property taxes owed to the county
• Judgment liens — court-ordered liens from lawsuits, credit card debt, etc.
• Mechanic's liens — unpaid contractor claims
• HOA liens — unpaid homeowner association dues
• Federal/state tax liens — IRS or Ohio tax debts

All of these get resolved at closing. The title company deducts the amounts from the sale proceeds and pays them directly. You don't need to pay them off before selling.

In Hamilton County and Montgomery County, title searches typically take 5-10 business days. Cash sales skip the appraisal and mortgage underwriting steps that add 30-45 days to financed transactions.

What about probate properties? If the owner is deceased and the property needs to go through Ohio probate, additional steps are required. The estate must be opened in probate court, an executor or administrator must be appointed, and the court may need to approve the sale. Cash buyers experienced with probate properties work with probate attorneys to navigate this efficiently.

Step 8: Closing Day

Closing on a cash sale is straightforward. Here's what happens:

1. Document review and signing — You'll sign the deed transferring ownership, the settlement statement showing all the numbers, and a handful of standard closing documents. The whole signing typically takes 30-45 minutes.

1. Fund disbursement — The buyer wires the purchase price to the title company. The title company pays off any outstanding liens and mortgages, deducts closing costs, and distributes your net proceeds.

1. Recording — The title company records the new deed with the county recorder's office, making the transfer official.

1. Key handover — You hand over the keys and any garage door openers, alarm codes, etc.

When do you get your money? In a cash sale, proceeds are typically available the same day or the next business day. Some title companies issue a check at the closing table. Others wire funds to your bank account, which usually shows up within 24 hours.

The Three Types of "We Buy Houses" Companies

Not all cash home buyers operate the same way. Understanding the differences helps you know who you're dealing with.

Type 1: Direct Buyers (Buy-and-Hold or Fix-and-Flip)

These are investors or companies that purchase your property with their own capital, renovate it, and either sell it on the retail market or add it to their rental portfolio.

How to identify them:

• They use their own funds or established lending relationships
• They can show proof of funds immediately
• They have a portfolio of properties they've purchased and renovated
• They close quickly because they don't need to find another buyer

Pros for sellers: Highest certainty of close. No middlemen. Fastest timelines.

Preston Hillard of Hillard Home Solutions is a direct buyer. When we make an offer, we're buying the property ourselves. No assignments, no finding another buyer, no surprises.

Type 2: Wholesalers

Wholesalers find properties, put them under contract at a low price, then sell (assign) the contract to another investor for a higher price. They pocket the difference — called a wholesale fee — which typically ranges from $5,000 to $15,000.

How to identify them:

• Their contract includes an assignment clause
• They need an extended closing period (30-45 days or more)
• They may ask for a very low earnest money deposit
• They cannot show personal proof of funds
• They may be vague about their renovation plans

Pros for sellers: Wholesalers sometimes offer higher initial prices than direct buyers. However, there's a higher risk of the deal falling through if they can't find an end buyer.

Risks for sellers: If the wholesaler can't find a buyer willing to pay their marked-up price, the deal collapses. You've wasted weeks that could have been spent pursuing other options.

Type 3: iBuyers

iBuyers (Opendoor, Offerpad, etc.) use algorithms to make instant offers on homes. They typically focus on homes in good to fair condition in specific markets and price ranges.

How to identify them:

• They make offers based on online data, often without a walkthrough
• Their offers are closer to market value than traditional cash buyers
• They charge service fees of 5-8% that reduce your net proceeds
• They have specific property criteria (age, condition, price range, location)

Pros for sellers: Higher offers than traditional cash buyers. Professional, predictable process.

Limitations: Not available in all markets or neighborhoods. Many Ohio neighborhoods don't qualify. They typically won't buy homes needing significant repairs, which eliminates the sellers who most need cash buyer services.

What Sellers Should Expect at Each Stage

Here's a realistic timeline for a typical cash sale from first contact to closing:

| Stage | Timeline | What Happens |

|---|---|---|

| Initial call | Day 1 | 10-15 minute conversation about your property and situation |

| Property research | Day 1-2 | Buyer pulls comps, tax records, and public data |

| Walkthrough | Day 2-4 | 30-60 minute property visit |

| Offer presented | Day 2-5 | Written offer with all terms |

| Contract signed | Day 3-7 | After your review and any negotiation |

| Title search | Day 7-17 | Title company researches ownership and liens |

| Closing | Day 14-21 | Sign documents, receive payment |

Some deals close faster. Properties with clean titles and motivated sellers can go from first call to closing in under two weeks. Deals with title complications, probate requirements, or complex lien situations may take longer.

How to Protect Yourself as a Seller

Selling to as is home buyers is safe when you take basic precautions:

Get multiple offers. Contact at least 3 cash buyers and compare their offers, terms, and professionalism. The best we buy houses companies in Dayton welcome competition because they're confident in their offers.

Read the contract before signing. Every word. If you don't understand something, ask. If they can't explain it clearly, consider that a warning sign.

Verify proof of funds. Ask to see a bank statement or letter confirming they can close. This is standard in the industry and no legitimate buyer will refuse.

Check licensing. In Ohio, ask whether the buyer or anyone on their team holds a real estate license. Licensed professionals are held to legal and ethical standards.

Ask about assignment. Directly ask: "Are you buying this property yourself, or will you assign the contract to another buyer?" Get the answer in writing.

Don't pay upfront fees. Legitimate cash buyers never charge sellers fees for evaluations, offers, or any part of the process.

Use a reputable title company. The title company protects both parties. If the buyer suggests skipping the title search or using a company you've never heard of, insist on using a title company you trust.

When Selling to a Cash Buyer Makes the Most Sense

Cash sales aren't right for every situation. They make the most sense when:

• Your home needs more than $15,000-$20,000 in repairs to be listing-ready
• You're in pre-foreclosure and need to sell before the sheriff sale date
• You've inherited a property and want to close the estate quickly
• You're going through a divorce and need to liquidate jointly owned property
• You have title issues that make conventional sales difficult
• You're relocating and can't wait for a traditional sale
• You're a landlord who's done managing the property and tenants
• The property has code violations that a traditional buyer's lender won't accept

How Hillard Home Solutions Works

We're a SW Ohio-based real estate company that buys homes directly. Here's what makes our process different:

Licensed Realtor. Preston Hillard is a licensed Ohio Realtor with eXp Realty. That means professional accountability, ethical obligations, and the ability to honestly compare your cash offer against what you'd net through a traditional listing.

Three options, not one. We evaluate every property for a cash purchase, a traditional listing, and creative solutions for complex situations. You get the full picture, not just one path.

Transparent math. We show you the comps, the repair estimate, and the formula behind our offer. No mystery numbers.

Fast and reliable. Most offers within 24 hours. Closing in as few as 7 days. We cover all closing costs and provide up to $1,200 in moving assistance.

Local expertise. We buy properties across Montgomery County, Hamilton County, Butler County, Warren County, Greene County, Clark County, and Clermont County. We know the neighborhoods, the contractors, and the local market dynamics. See what we offer in specific areas like Mason, Middletown, Hamilton, and Lebanon.

Ready for a no-obligation offer on your property? Call (937) 907-1743 or visit hillardhomesolutions.com to get started.

Frequently Asked Questions

How do "We Buy Houses" companies make money?

Cash home buyers purchase properties below market value, invest in repairs and renovation, and then resell the property at full market price or hold it as a rental. Their profit comes from the difference between what they pay (purchase + repairs + holding costs) and what the property is ultimately worth. The typical target margin is 15-25% of the ARV after all costs.

Do "We Buy Houses" companies actually pay cash?

Most do, though "cash" in this context means the buyer doesn't need a mortgage. The funds may come from the buyer's bank account, a private lender, a hard money loan, or a line of credit. The key benefit for you as the seller is that there's no bank underwriting or appraisal requirement, which eliminates the most common reasons traditional sales fall through and allows for much faster closing.

How much below market value do cash buyers typically offer?

Cash offers typically range from 60-80% of a property's fair market value, depending on condition and needed repairs. A home in reasonably good shape might receive an offer at 75-80% of value. A property needing $50,000+ in major repairs might receive an offer at 55-65% of the after-repair value. The discount reflects repair costs, risk, holding costs, and the buyer's profit margin.

Can I sell my house for cash if I have a mortgage?

Yes. Your mortgage balance is paid off from the sale proceeds at closing. The title company handles this directly, sending the payoff amount to your lender. You receive whatever remains after your mortgage, any liens, and any closing costs are satisfied. If you owe more than the cash offer, you'd need to bring the difference to closing or explore a short sale with your lender.

What paperwork do I need to sell to a cash buyer?

You'll need your government-issued photo ID, your property deed or evidence of ownership, recent mortgage statements (if applicable), property tax statements, and any HOA documents. If the property is in probate, you'll also need your letters of authority from the court. The title company and buyer handle most of the paperwork — you primarily just need to sign at closing.

How fast can a cash buyer close?

Most cash sales close in 7-21 days from signed contract. The primary variable is the title search, which takes 5-10 business days in most Ohio counties. Properties with clean titles and no complications can close in as little as 7 days. Properties with liens, probate requirements, or title defects may take 3-4 weeks to resolve before closing.

What happens if the cash buyer finds problems during the walkthrough?

Experienced cash buyers expect problems — that's why they're buying as-is. Finding issues during the walkthrough typically doesn't kill the deal. It does affect the offer price, though. A buyer who discovers a failing foundation will estimate that repair cost and factor it into their offer. This is why honest disclosure upfront is in your best interest — it prevents surprises that could delay or derail the transaction.

Should I get my house appraised before selling to a cash buyer?

You can, but it's usually not necessary. A professional appraisal costs $300-$500, and the appraised value may not reflect what a cash buyer will pay (since cash offers are based on ARV minus repairs and margins, not current appraised value). Instead, research recent sales in your neighborhood online and get multiple cash offers to compare. If you want a professional opinion, Preston Hillard can provide both a cash offer and a listing price estimate as a licensed Realtor — giving you two data points at no cost.

Is it better to sell to a local or national "We Buy Houses" company?

Local buyers typically offer several advantages: they know neighborhood-level price differences, they have established contractor relationships for accurate repair estimates, they can visit the property quickly, and they're accessible if issues arise. National companies may have more capital but often rely on local subcontractors and may not understand the nuances of your specific market. For SW Ohio properties, working with someone who knows Montgomery, Hamilton, and surrounding counties intimately usually leads to a smoother transaction and a fairer offer.