At the moment, there’s a lot going on—understatement of the year, right? We’re still dealing with a pandemic, civil unrest, political tensions, and economic uncertainty. Fear and doubt are plentiful in this climate, and unfortunately, there are people out there willing to prey on homeowners’ equity.
Let’s look at an example of an off-market deal that took place last month in Bay Park. At 1:12 in the video above, you can see the net sheet for this particular transaction. In a nutshell, a wholesaler called up a homeowner and said, “I’d love to buy your home as is—no Realtor commissions, closing costs, termite inspections, or repairs.” The wholesaler offered the seller $650,000. However, without even putting a dime into escrow, the wholesaler said, “I’ll buy it, or assignee.” If you hear “or assignee,” you should be on high alert; the “assignee” in this case ended up being another investor who in turn bought the home from the wholesaler as is for $740,000.
That means this Bay Park home seller lost out on $90,000 simply by not reaching out to explore their options for exposing the home on the market. But it gets worse; while in escrow, that “assignee” investor suddenly decided that the project wasn’t worth their time, so they sold the home yet again, this time for $790,000. Now, the original unsuspecting seller forewent $135,000 because they didn’t even explore listing their home the traditional way.
I’m not claiming that there aren’t valid reasons to opt for an off-market sale; they can be a lifesaver for sellers who need quick cash with no hassle or those who don’t want strangers traipsing through their living space in this era of COVID. That said, don’t jump on the first off-market offer you get. If you come to us expressing interest in an off-market sale, we’ll send your home’s details out to five or 10 different investors, then use our discretion and experience to select the best deal.
Sadly, situations like the example we reviewed today have happened all too often in our market this year. To reiterate my previous market updates, we’re firmly locked into a seller’s market. Nationally, 400,000 fewer homes have been listed this year compared to last year, but the number of transactions is actually up. That means prices continue to rise, and that’ll be the case for the foreseeable future, regardless of the election’s outcome. Don’t forget: As a seller, you get to control the terms.
So, if you’re considering an off-market deal, please give us a call or send an email. I’m not interested in scoring extra deals for myself, I’m more interested in making sure you don’t needlessly lose out on gargantuan sums of money, like $135,000—I truly hate to see it. We’re always ready to help, and we hope you reach out with any questions you may have.