Dec. 27, 2018
If you're a property owner, you are no doubt inundated with unsolicited quick-cash offers to purchase your property. You receive handwritten letters and postcards, text messages, and phone calls.
With home values strong and competitors like OpenDoor and Zillow purchasing properties, it's becoming more and more difficult for Fix-and-flip and Wholesale Investors to find profitable investments. So they are calling, texting, and mailing every homeowner and their relatives trying to buy homes before they get listed on the open market.
There are seven things Investors don’t want you to know.
1. They are offering you far less than your home is worth, so they have a wider profit margin to fix and flip it. The cheaper they can buy your home, the more money they can make.
2. They are offering you far less than your home is worth so they can wholesale it to someone else. Again, cheaper…
3. They buy and sell homes all day, every day. You know your job far better than someone who has never done it. Wouldn’t you feel like you had an unfair advantage over someone who doesn’t do it every day?
4. They have no obligation to look out for your interests. Cash-Offer Investors are purchasing for themselves and don’t represent you or your interests. While still legal, their attorneys have written their own contract that heavily favors the buyer-investor and not the unrepresented Seller (that’s you). Investors are not REALTORS and are not bound by the National Association of REALTORS (NAR) Code of Ethics and Standards of Practice.
5. You don’t have to automatically discount your purchase price or give them a credit at closing for repairs for items they find during the inspection period. While everything is negotiable, the standard AAR Purchase Contract your REALTOR utilizes allows for the Seller to have the opportunity to make any requested repairs, if they choose, instead of automatically giving the option to renegotiate the terms of the agreed upon price and contributions at closing. You don’t have to knock dollars off your sale price – or your bottom line – for an Investor’s exhaustive wish list.
6. Inventory across the valley is LOW in most markets, and it is highly unlikely your home will sit on the market for an extended time. According to MLS Market Summary reports, for the last half of 2018, the average Cumulative Days on the Market (CDOM) has ranged from 60-65 days. When you consider most closings take 30 days from the time a purchase contract is accepted, that’s a pretty remarkable timeline for getting full market value for your home.
7. They don’t want you to hire a REALTOR. They may suggest it’s easier if you don’t get ‘professionals’ involved, but full-time Investors are professionals. They don’t want you to have someone on your side who understands the purchase contract and real estate laws in Arizona, and who will represent and leverage your interests in the transaction. Some offers claim to save you money in commission (by only charging you a commission for THEIR REALTOR) but then can cost you more in the end in listing and 'convenience fees’ - in addition to the repair credits — all without the benefits that representation by a licensed REALTOR would provide.
I understand that for some Sellers the quick-cash offer is a great way to go. But please keep in mind, the priority of the Investor-Buyer is their profit margin. So, before you entertain the idea of a quick-cash offer, from either a private investor or a large company, know your position. And give me a call. I’m happy to run some numbers and give you the information you need to make an informed decision that’s right for you.