You have seen the signs: We buy homes for cash, but is it legitimate?
Ask Phyllis is a blog series of frequently asked real estate questions. Have a question about real estate? Email us here
Dear Phyllis,
I look forward to your weekly advice, and I believe my situation is unique. I serve as the trustee for the sale of my mother’s home in a small Midwestern town. This market operates very differently from ours. I am now in month five of a six-month listing, and I want to complete the sale as soon as possible. Six of us will split the proceeds, and I mainly want to bring this process to a close.
I have seen companies advertise that they will pay cash for homes. Even though I know I will not receive my full asking price, I would rather move the property quickly and move on. Thanks in advance for your input. Reluctant Trustee
Dear Trustee,
I understand the responsibility that comes with serving as a trustee, and I recognize how time-consuming the process can become. I also see those “we buy homes for cash” signs posted along freeway on-ramps, and I understand why they catch your attention.
However, investors who offer quick cash purchases do so to earn a profit. They typically buy below market value so they can resell at a higher price later.
In your situation, a lower sale price may feel less significant because six people will share the proceeds. Still, I encourage you to weigh speed against value before you make a final decision.
In this instance, let’s address why your home hasn’t sold. What does your Realtor have to say on the subject? Moreover, ask at what price your Realtor believes your home will sell. Once you are armed with this information, you can meet with someone who will pay cash for your home and learn at what price and how long before they cash you out. Therefore, it wouldn’t hurt to check with your current real estate agent and ask her if she believes she can sell your home quickly for perhaps 5%- 10% over the cash offer (or whatever amount you feel is worth the trouble).
Finally, as with any contract, please read the fine print carefully, or better yet, have the real estate attorney who prepared your mother’s trust review the documents.
Call Phyllis @ 818 790-7325 or email her at [email protected] with your real estate questions.
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