With the rise in Investment Companies buying homes from the general public, in a more publicized format, I wanted to shed some light on the topic. I’m sure you’ve heard on the radio, seen online ads or watched commercials on TV where a company will send you a cash offer for your home in less than 24-hours. This practice is nothing new. It’s just more apparent now than ever.
Being an investor myself, I too, would be happy to provide a cash offer price to someone within 24-hours. Unfortunately, that price won’t be at full market value though. If it was, then it wouldn’t be a good investment now would it. These homes are being purchased and then resold for a profit. After all, these companies are in business to make money… it just happens to be your own money they’re taking.
There are the incentives offered such as being able to move when you want, pick your closing date, make no repairs, etc. Again, nothing new here… I routinely will allow these same choices when I am buying a new investment. However, there is a price to pay for such conveniences. We are commonly seeing 18% “convenience” fees being taken off the so called price.
The biggest issue when you go down this road is that you’re alone… you have nobody to represent you or your best interests! The buying company does not represent you and they’re looking out for their own pockets and interests.
So how does this all happen? Well, often times, people get in so deep that they don’t know how to turn back. That’s when it’s too late. The contracts used in these transactions are created by the Buyer… that means they’re favoring the Buyer!
Remember I said the buyer is purchasing to resell for a profit… well, they’re going to have an inspection completed and they’re going to expect you to make repairs. If you don’t want to, then they will just take more off the price. This allows them to have you pay for the repairs one way or another, ensuring the home is ready for them to resell quicker.
You still have to pay your normal closing costs of title policy, recording & escrow fees, tax prorations, HOA Disclosure, etc.
The commission you’re supposedly saving by not hiring a REALTOR® is far less than what you’re actually losing.
Some will say that they cannot deal with the stress of placing their home on the market… the showings, the marketing, the paperwork, etc. That’s why we are here. We take that stress off of you and handle the transaction on your behalf. We promote your best interests throughout to ensure you walk away with every dollar possible.
Let’s recap:
- Starting Price is less than Full Market Value.
- You are Unrepresented in the Transaction.
- You still have to make (or pay for) repairs.
- You pay an 18% “Convenience Fee”.
- You still pay normal Closing Costs.
Can selling to an Investor be the right route? Absolutely. However, it really depends upon the situation and surrounding circumstances. That’s where we can assist and provide guidance. It costs you nothing, but could save you tens of thousands of dollars! If you’re thinking about selling your home, then please give us a call @ 623-203-2264 to discuss the next steps in determining what’s right for YOU. I might even be your best investor, if it needs to go that route 🙂
