“We Buy Houses.” Sorry, Not Mine!

 

A few blogs ago I chronicled the meteoric demand for homes in our area with prospective buyers elbowing each other to bid on houses with offers sometimes exceeding $50k to $100K over the asking price including hordes of cash up front.

As an example, the home directly across the street was on the market exactly three days before it sold. During that brief span I witnessed some 50-60 hopeful homeowners getting the grand tour from various real estate agents. Although only 1,700 or so square feet, the home sold for over $700K. Yes, you read that correctly.

A week does not pass by when I don’t discover at least 3 business cards in my mailbox from realtors urging me to contact them when I’m ready to sell. Several of the more aggressive ones even took it a step further by calling me directly. As if I don’t already receive more than enough spam calls from expiring auto warranties and replacement window offerings.

But with my oldest daughter’s wedding less than a week away, the Mrs. made it clear we’re not going anywhere for the near future. End of story.

So, as you might imagine, this seller’s market has triggered not only a frenzy among realtors but also a quantum increase in those cardboard signs you see posted along the roadways and nailed to trees – often handwritten – trumpeting the fact they buy homes for cash.

Now I’m confident I don’t know anyone who would actually engage any of these people and negotiate a selling price, but someone must do it or else these makeshift billboards would not proliferate to the point they’re at now.

So, I decided to do a little research. Not surprisingly there were a number of articles on the subject, outlining the advantages of selling to an all-cash buyer including a faster closing period and skipping the often-costly appraisal process. If the home is in poor condition, often the owner does not want the hassle of costly repairs or the headache of having to “stage” the house for prospective buyers.

Obviously like anything else, there are risks and pitfalls.

All-cash buyers usually offer 65-90 percent of the homes value, knowing that the owner does not want to have to go through a negotiation. And like magazine subscriptions or health club memberships there’s always the danger of the “bait and switch.”

Wherein a verbal contract is agreed to and then when the official document is presented, it reads completely different to the terms that were reached.

Even more dangerous is a tactic called “equity skimming.” Sellers desperate to unload their property are vulnerable to this fraud as to someone gains the title to the home, refinances it without the owner’s knowledge, takes the equity and then disappears leaving the seller with a home, no equity and often facing foreclosure implications.

So, for the time being I am staying put. In fact, I’m thinking of crafting a sign myself with “Not for Sale!” in bold block letters. Now if only that would also work for auto warranties or replacement windows.