We'll Pay Cash For Your Home
Considerations to make before wholesaling your home
This morning, I woke up with a bad taste in my mouth. Most people do. Even if we brush our teeth before bed, something happens in the night with the decrease of saliva and increase of bacteria in the mouth that results in an unpleasant odor in the morning. Yet, this was different. I reminisced on what sort of pungent spice or flavors were included in last night’s dinner but came up with no culprit. Then it hit me: Last night, I arrived home to a cute little handwritten sticky note on my front door. “Full Price CASH offer for your house,” followed by a phone number.
This was not the first sticky note I have found on my door, or in my mailbox, nor will it be the last. In fact, if I was counting, we would probably settle on a number in the triple digits. I’m not alone either.
A frequent question I receive in regard to these benevolent invitations is appropriately, “Is this a legitimate offer?”
Like many locals, I have a membership to a wholesale warehouse.
For $100 a year, I can get a discount on many bulk items. After all, who doesn’t need a 10 pound bag of gummy worms or a 462 ounce can of pork and beans? We get these items for less than retail price because we are willing to wander through what is essentially a giant meat locker, dodging forklift operators, and “driving” rogue shopping carts with inhibited views due to stacked pallets of toilet tissue and paper towels. Although the single-bite buffet (during pre-COVID times) could be considered a dining delight, the florescent lights, self-checkout and exit door pat down is a cool reminder of the price we pay to save money.
When it comes to wholesaling
a home, however, the stakes are far bigger than a $3 discount on a 5-pound block of Kerrygold cheese that will likely grow mold long before it can be consumed. When a potential buyer approaches an owner with cash, I can assure you it will not be market value.
Some buyers are actually wholesalers. Much like Sam’s Club or Costco, only very different, a wholesaler will want to know what is owed on the home, if anything, and offer exactly that amount in cash to “take it off your hands.”
They will even offer to help you move, buy it as is, and forgo inspections and appraisals. They will then either “assign” the contract to another buyer for significantly more than what they spent on the property, or they will turn around and sell it at a retail price for significantly more than what they spent. Either way, someone is making a ton of money, and it’s generally not the seller.
Despite the hordes of hate mail I am about to receive from the many wholesalers in the industry who are posing as the proverbial knights in shining armor, my allegiance belongs to the public who, at the very least, deserve to be educated on the cash offer.
First, as we are experiencing a historic low in real estate inventory, it is an extremely unique circumstance in which a seller would find themselves owing more than what their home is worth.
While no property owner is immune from such “wholesalers,” these cash-fertile buyers tend to target expired listings, ugly homes, homes with notices of default filed (missed or late payments), homeowners who have filed bankruptcy, owners who have filed for divorce, or homes with deferred maintenance. In this market, in nearly every instance, the seller could still make substantially more money, in a very short period of time, if the home was listed.
Second, all money is essentially
cash in the end. Although cash buyers can forgo the appraisal and can close quickly because they don’t have to wait for a loan to be underwritten and approved, with the lack of inventory and multiple offers on nearly every listing right now, many buyers are agreeing to forgo the appraisal condition anyway, and most can close in as little as 24 days. If it’s a difference of $100,000, wouldn’t it be worth it to wait an extra 10-15 days to get the maximum amount your home is worth?
Third, do you really want to trust the person buying your home to come up with the sale price?
At the very least, get a neutral opinion from a reputable, licensed Realtor. Selling your home should not leave you with a bad taste in your mouth.
Jen Fischer is an associate broker and Realtor. She can be reached at 801-645-2134 or firstname.lastname@example.org
We'll Pay Cash For Your Home
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