I Want To Buy Your House!
Tags: Real Estate Agents, Real Estate, Selling, Buying
Has anyone received these hand-written notes in their mailbox? We get a continuous stream of them, not to mention the multitude of yard signs all over Durham Region advertising “We Buy Houses – Any Condition”.
Here are some of the homeowner benefits mentioned:
- No repairs
- No commissions
- No Open House,
- No Stress
- Flexible Terms and Closing Date
- No Endless Showings of People Walking Through Your Door
- And more…
I’d like to first give credit to this approach. It’s a legitimate business model used by investors and typically taught by one of the many investor networks to their audience. Nothing wrong with it but there are always two sides to a story and I’d like to present the other side, for the benefit of anyone who may consider this type of Offer.
As investors and/or potential fix & flippers, these folks need to buy a property cheaper than what someone else is willing to pay for it. They also need to pay for repairs, re-market the home and make a profit on the sale. Sellers often think if they have a distressed property, no one will buy it. That is a misconception that investors use to their advantage.
2021 has been an exceptionally strong Seller’s market. It’s driven by supply (low), demand (high) and interest rates (low). This has created a very large pool of buyers competing for homes. All types of homes. For example, we recently sold a property that was completely distressed. It needed to be cleaned out (you could barely walk through it), needed all new electrical, heating, plumbing, windows, flooring, kitchen, washrooms; basically, everything but the shingles and exterior brick walls had to go. It took a crew of 6 men three days to clear out all the junk! The home had a recent appraisal and it was listed at the appraised value, simply because it required so much work just to make it habitable.
An investor would have been happy to buy this home for the appraised amount or even a few thousand more, making this look like a great deal to the Seller with no muss or fuss. Wisely, the Seller listed it with us and we created a marketing strategy to maximize the sale price for the Seller. Though we knew what the power of exposure could do, even we were surprised by the outcome!
Over a 4 day marketing blitz the home had 88 showings, 1 Offer within 2 hours which wasn’t entertained and 18 Offers after 4 days, which were entertained. The property sold firm, without any conditions for $175K over the asking price. We listed it “As Is” with no representations or warranties by the Seller.
So to address the points made in the investor mailouts we all receive,
- No repairs – the Seller was willing to do some electrical work but we advised against it. The home had 60 amp service with knob & tube wiring and there would have been too much to do. No repairs were done and it was listed in “as is” condition.
- No commissions – The Seller did pay commission but that amount paled in comparison to the amount of money he received over and above the asking price. To be exact, he paid $26,750 in professional fees but netted just under $150,000 over his asking price. Was that a worthwhile investment? In other words, the Seller spent 5% to net 48.6% over his asking price; a pretty hefty return on his investment.
- No Open House – this is not a feature, but a fact. We haven’t had Open Houses in over a year due to COVID. This really isn’t a modern-day benefit so this particular investor is a little out of touch.
- No stress – the property was vacant and the Seller lived out of Province. He had absolutely no stress at all and accomplished everything with electronic signatures.
- Flexible Terms & Closing Date – with a strong Seller’s market like we’ve had, Sellers are able to dictate their best terms and closing date. The demand in the current market practically assures them of achieving that. Again, no benefit.
- No Endless Showings of People Walking Through The Door – if you want the most money for your property, you WANT an endless stream of showings through your door. This is what creates competition and the highest price for your home that the market will bear. It’s a small price to bear for achieving tens of thousands of dollars over your asking price.
There are Buyers for ALL types of properties. I wouldn’t let these mail propositions lead you to think you’re getting a deal. Good agents are experienced in knowing what a market will or won’t produce and what the best strategies are for any given situation. Yes, you may pay a commission but it’s totally about what you put in your pocket at the end of the day. Speak with an agent and take the information in. Then, if you still want to sell your distressed property off-market, at least you’ll know what you’re giving up!
Give us a call anytime for a free market evaluation. We’ll talk about prices, strategies and what we do in plain language to get you the highest value for your dollar. We’ll treat your home like it was our own!
