We Pay Cash for Houses – Here’s How it Works

Sound easy? That’s because it is! Read on to learn about how we pay cash for houses:

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We will meet you at the property and go over any questions you may have. At that time or shortly afterwards, we can give you an all cash offer.

You take our offer to a lawyer (we can recommend a few if you need), they will go through the offer with you and if everything looks good, sign the papers and your house is sold!

That explains the basic steps, but what will my Offer be?

To help you understand how we are able to pay cash for houses, we encourage you to continue reading below and see how we have been able to help many happy customers.

In the section below, I’ve outlined how we come up with our offer prices. Please read through this carefully, as it will make you fully understand our process. We have nothing to hide!

We want to pay as much as possible for your house!

It’s in our best interest to give you our highest possible offer. 

Typical “We Buy Houses” companies often try to give you the lowest possible offer on your property, and sometimes even take advantage of people who are really desperate by buying their houses way more cheaply than they need to.

At I Buy Winnipeg Houses, we are not like this. We take the time to visit your house, talk to you, understand your situation and then carefully analyze the deal. We care about each of our clients and genuinely want to help them out. By carefully going through this process, we are able to give you our highest possible offer, which is based on your home’s “After Repair Market Value”.

What is After Repair Value?

This simply means what your house would be worth, completely fixed up. Once we have this After Repair Value number, we work backwards to figure out our maximum purchase price.

How exactly does this work?

  1. Let’s say you have a house that you want to sell fast that hasn’t been updated in over 30 years and has some other major repairs that need to be done. 
  2. Let’s also say your neighbour, with the exact same house as you, except they have done a lot of upgrades over the years such as a remodelled kitchen, new flooring and a new bathroom, and the house is in pristine shape. 
  3. Imagine this neighbour’s house, fully renovated and up to date on maintenance, sold for $300k

What do we do now?

Well, we know that your house will require extensive renovations in order for it to appeal to most homebuyers and get close to the $300k price mark that your neighbour got.

If we have visited the house, we will know the cost of the repairs needed in order to reach that $300k price point. Based on this, we formulate an offer for your home.

The Offer:

We value honesty and transparency with our clients, which is why we are happy to share our numbers in how we come up with our offer prices and pay cash for houses.

[Your Offer Price] = [After Repair Value] – [Cost of Repairs] – [Our Selling Costs] – [Our minimum profit]

Here is what everything means:

After Repair Value (ARV): This is the market value of the property after we buy and renovate the house, just like on HGTV!

Cost Of Repairs (COR): This is our cost of fixing and updating the house after we buy it from you. This includes hiring subcontractors, paying for materials, etc.

Our Selling Costs: Although we buy houses without using agents, we use an agent to sell our homes after we have purchased and fixed them up. We have to pay agent fees, closing costs, taxes and holding costs while we are doing the renovation. Usually this is around 10% of the ARV.

Our Minimum Profit: We are a business at the end of the day and need to make a living so we can keep doing this! Keep in mind we pay cash for houses and this can be a risky business. The minimum profit is the number we need to make in order for us to stay in business, have enough to pay the bills and take home enough money, based on the number of deals we do per year.

Back to our example…

Your neighbour sold his fully renovated house for $300k, and it is identical to the layout of your house in every way, except that your house needs very extensive renovations.

Here are some photos from a project we actually completed to give you an illustration of how this works:

1) Let’s say your house is in this condition currently: 

Outdated and needs some repairs!

2) Now remember the neighbour with the same house as you? They renovated the house top to bottom, with a new kitchen, flooring, bathroom etc etc. Well, this is what the house looks like now:

Much better! Who wouldn’t want to live here?

3) No wonder the neighbour sold for $300k, the new homeowner can move in and doesn’t have to worry about doing any renovations or maintenance that has been deferred!

Now We Are Ready To Make You An Offer!

ARV (After repair value) = $300k

COR (Cost of repairs) = $50k (after visiting your house and crunching the numbers)

Our Selling Cost = 10% x $300k = $30k

Minimum Profit = $30k

[Your Offer Price] = [After Repair Value] – [Cost of Repairs] – [Our Selling Costs] – [Our minimum profit]

Your Offer = $300k – $50k – $30k – $30k = $190k

Your Offer = $190k. Remember, we pay cash for houses. Better yet – you have no fees or commissions to pay!

See what we can offer you for your house…

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