Just a quick public service notice. Please do NOT SELL YOUR HOME to anyone claiming to pay all cash, no fees, can close quick, no showings, etc. without talking to your local REALTOR®. You have seen their ads or received their letters in the mail. Simply put they are buying the home to flip it. No harm in that but they can’t flip it unless they buy the home at well below market value. It’s very simple, if the offer you receive from this company is say $400,000 your home is likely worth more, and often much more, than that.
Unfortunately, I’m seeing these transactions all over the surrounding towns. I got a cold call a few weeks ago asking if my wife and I wanted to sell our home. I said no. He persisted and said, “would you like to get an all-cash offer?”. I said sure why don’t you get back to me with an offer. He got back to me two weeks later with an offer that was at least 40% less than what it our home was worth. Not only that, but they also only offered to put $100 into escrow to hold the home. That is their commitment to my ®home. So, if when they saw the home and thought, ah forget it, we don’t want it now they could pull their offer and be out only the $100, or worse we get to the closing and they decide that they found a better home to flip, walk away losing only the $100. Standard in the industry is that 5% of the purchase price goes into escrow, this represents an amount that is extremely difficult/impossible for a buyer to walk away from.
One of the reasons you hear is that they will pay cash and don’t need a mortgage. The argument I hear from them is, “Well John, we don’t have to show it 100 times and we are being paid cash from this buyer!” Great. Is that worth 30-50% less? Literally tens, often hundreds of thousands of dollars less! A buyer will argue that you don’t have to worry about an appraisal on an all-cash deal and while that is true, in the hundreds of deals I have put together (humble brag) I only need a few fingers to count the number of times an appraisal came back too low and most importantly ALL of them were resolved and went to closing. While a cash offer can make the transaction go smoother, most home sales involve a buyer who is getting a mortgage. Last time I checked a purchase price of $500,000 in cash and $500,000 with a $400,000 mortgage nets the seller the same amount…$500,000. The amount you receive as a seller is the same. An all-cash offer vs. an offer of the same amount with a mortgage makes me think of the riddle “What weighs more? One hundred pounds of bricks or one hundred pounds of feathers?”
Not everyone is trying to get the last dime out of their home. Many of my sellers loved to see a young family buy their home or someone who will keep the home as they did. There is no reason to jump at their offer, call your local REALTOR®! We know the market. We live here. We can give you a fair market value on your home and explain your options. What you do from there is certainly your decision but remember that these companies are looking out for themselves not you. Your REALTOR® always has your best interests first and foremost.
If you have any questions about this article, real estate in general or are looking to buy or sell a home please contact me, John McCarthy at Rowley Realty, 165 Main St., Rowley, MA 01969, Phone: 978 948-2758, Cell 978 835-2573 or via email at email@example.com Check out our new website at www.rowleyrealestate.com