In response and thanks to a recent comment, I feel this post needs to go out immediately. As a homeowner selling your home, it’s your job to identify what you feel is the strongest offer on your home. What do I do? I take the strongest and weakest offers and set them aside. Not for good, just for further analysis. Why do I not jump on the strongest offer? Here’s why:
It is heavily taught (while mingling in the REIA’s you can’t help but overhear this on a constant basis) that you can increase your odds of landing the “deal of the century” by creating multiple “lowball” offers to as many sellers as you can. This simply means that investors have put together “machines” or “systems” that either automatically or manually submit many CASH offers to as many homeowners that fit their pre-determined list of criteria for that group of offers. Could be something as simple as out-of-State owners (this was always amusing to me… I live in a different State so I must be desperate to sell my house?) The offers will contain very strong wording indicating that they will be closing QUICKLY and for CASH and they have earnest money being held in escrow already… WOW… whata buyer! Now Let’s look at the Truth (uh oh.. I feel the investors cursing me now)…
The offer is derived from a formula. Here is a typical formula that’s widely used across the country – Offer $ = ARV(70%)-Repairs. What in the world does this mean? It means that the Offer price shall equal 70% of the After Repaired Value (appraised value of home after possible remodel or improvement) LESS, or MINUS the cost of doing those improvements. They’ll probably go ahead and subtract closing costs out of that as well.
They will NOT be closing quickly the majority of the time, they will be backing out of the contract via a well inserted weasel clause as we talked about in other posts. What about the earnest money? Simply put, a friendly attorney or broker is holding this earnest money. Not only does it represent the earnest money for YOUR house, but it represents the earnest money for all the other houses as well!!! The funniest part? That’s perfectly legal if done properly!
So now you can see from a homeowner or sellers point of view, why you MUST keep an eye out for this scam! If you are not getting offers on your home and you really do need to sell quickly for whatever you can get, than this is your game. Just cross your t’s and dot your i’s in this transaction. Know who you are dealing with, alright!
How far would you go to make a quick home sale? It seems that many homeowners will even lie to get a sale when asked about traffic noise, neighbours and even hiding problems in the home away from the buyer. If you want to do all you can to help sell your home there are many precautions and measures you could take. Cleaning your home and making it smell fresh, giving it a lick of fresh paint. You could also consider selling with a company that offers to buy homes quickly and for cash.
Wow.. two thumbs up for the line on hiding problems. Did you all see the new movie out recently about the un-disclosed haunted house? LOL… a far cry from what you’re referencing, but the point is… lying does go both ways… buyers AND sellers can sometimes out do each other in the “real estate game”! I do however see that you are promoting your quick home sale program, which is fine, I have no problem with that on this blog FOR NOW. I am sure you’ve read through here first before posting… good luck to you all!