Recently I listed a property at 392 Wren Drive in Santa Rosa. The property needed some help to bring up the value. By doing a number of home improvements we were able to realize much of it's potential. I figured before the work a good listing price would have been $549,000. We were able to put the property on the market for $599,000 and attract four offers, getting it bid up substantially from our asking price. In the end, for every dollar we spent we got nearly two back.
A week before we put the house on the market my sellers got a solicitation in the mail from an independent flipper offering to purchase their home. They gave me the contact information so I called the person/company, and had a good conversation with them. We spoke about the property and the sight unseen value they had in mind was up to $500,000. There’s no telling if they actually would have wanted to make that offer after walking through the property, and in fact I wouldn’t have been surprised to see them make an offer in the mid $400’s if I wasn’t involved.
I bring this up because I recently read the following article recently about home buying scams:
https://www.propublica.org/article/ugly-truth-behind-we-buy-ugly-houses
It’s a fascinating article about predatory home buying. I do a lot of work with older clients, and it was pretty shocking to read how they been allegedly targeted and taken advantage of (among other ‘vulnerable market segments’) by Homevestors of America https://www.homevestors.com/. We have a local Homevestors franchise, and if you listen to the radio, you’ve probably heard advertisements for John Buys Bay Area Houses. https://www.johnbuysbayareahouses.com/
The first thing to know when considering calling Homevestors or one of their franchises is that they aren’t Realtors. There is no fiduciary obligation for them to help you get the most money for your house. The opposite is quite true, where the lower the price they give you for the house, the more money they will make on the other end of the sale and the better it is for them. You are selling your property for a low price, and as a trade off you are getting a quick cash transaction without having to do anything. For a property owner in a tight financial situation this can have some appeal, but to me it’s the ultimate way to ‘leave money on the table’ for the other side to grab.
Here's the kicker: even with a minimal amount of time and effort, I’m confident that 10 times out of 10 if you work with a Realtor you are going to end up significantly greater net proceeds.