Have you received unsolicited calls or letters from real estate agents who offer to buy your home? You might even have received an actual Purchase and Sale Agreement with your name, address and a purchase price already filled in. Have you wondered how they chose you and if the price they are offering is fair?
Before I answer those questions, let me provide a little background information.
Some real estate agents specialize in finding low-priced properties for developers who want to build and sell new homes. An influx of new construction can be a very positive, effective way to build or revitalize a community because many buyers want brand new homes rather than existing homes. The construction of new homes creates jobs and often brings economic benefits along with the new residents to a community.
Many builders hire or team up with real estate agents who look for properties that can be developed. These agents look for neighborhoods that are perhaps undervalued but still well located. Prices and property taxes in these areas tend to be lower, allowing builders a better chance of making a profit on their investments.
Now, back to the questions I posed in the first paragraph.
You and your home may have been chosen because you have lived there for many years. This increases the likelihood that the mortgage is paid off and you may be at a point in your life when you are thinking of downsizing. Such circumstances can make a cash offer from out of the blue seem more attractive than going to the work of putting your house on the market in the traditional way.
How do you know if the unsolicited offer you received is a fair price for your property? Chances are, you don’t know. Very few home owners can accurately estimate the current market value of their own home without first doing a lot of research. A much easier way is to contact your real estate broker (me) and ask for a free, comprehensive market analysis.
I can pretty much guarantee you that the price you would receive for your home on the open market will exceed the offer from the developer by tens of thousands of dollars. This is not because the builder is trying to cheat you, it is because he is running a business and he needs to make a profit, which is not usually possible if he pays you full market value. He is hoping that the opportunity for you to make a quick, cash sale at a lower price will outweigh the financial benefits of putting your house on the market. Sometimes it does.
If you receive an unsolicited offer to buy your home and would like my help in evaluating the offer, give me a call at 206-708-9800. I am happy to provide you with a free comprehensive market analysis (aka CMA) that will help you clarify your options. No obligation, no pressure.
Be aware that some “offers” you receive may not be from anyone represented by a licensed real estate broker. The note pictured below is from a company with a questionable business model. These hand-written notes are apparently designed to give the homeowner the impression that a passer-by liked their house enough to stop and inquire if it is for sale. In reality, this company has targeted specific homes and researched them ahead of time. Although this company apparently buy and sell homes, they are not affiliated with a licensed real estate company or builder. If you consider responding to such an offer, I strongly recommend that you consult an attorney to be sure that the business is on the up-and-up.