Sell Your House in 7 Days - Deal Or Scam?Sell house fast cash as is
- I'm sure you've seen these advertisements on bandit signs by the highway, or in the real estate section of the newspaper. If they are realistic - or are they just a scam, perhaps you've wondered?Sell house fast cash as is
- Well, the truth is that the better ones are genuine. They may be placed by private investors who may have immediate use of funds and will manage to close on your property quickly. They will often cover the closing costs, and definately will certainly arrange all of the paperwork. Sounds too good to be true? Well, it isn't, but there is a snag - I bet you guessed that!
If someone is prepared to purchase your house, for those cash, and close in 7 days, they are not likely to pay retail market price. That's an undeniable fact - they can't afford to. These individuals usually are not philanthropists - they are doing this to produce a profit (although the reputable ones also like to consider these are helping people in distress). So, somewhere below the retail market value is what you can expect to see on their offer. Just how much below market price? It depends on the condition of the property, its location, and a number of other factors, but it could be around 70% of the retail price.
Before you think this is just a plain rip-off - consider it. You would pay them at least 6% if you sold the property through an agent. Add on closing costs, inspections that you might pay for, as well as a small discount around the sales price, and it can easily get up to 10%. Then you could element in your holding costs. If this takes you half a year to market your house and that's not bad in today's market), you have your monthly costs - loan payments, tax, utilities and insurance etc - to taken into account as well. On the house worth $250,000, the monthly outgoings could easily be $2,500 per month. Over six months, that comes down to another 6%.
Add-on the costs of preparing the house for retail sale - maybe another $5,000 as well as the situation could appear to be this:
Price tag $250,000
Discount for sale (2%) 5,000
Agent's commission (6%) 14,700
Closing costs (2%) 4,900
Net sales value 225,400
Holding costs 15,000
Sale preparation 5,000
Total costs $20,000
Cash available $185,400 (74%)
So, if the house sells in 6 months, and you only have to discount by 2%, you might walk away with about 75% of the asking price. If the market continues to decline, or you have to cut your price for a sale, that could soon be below 70%. I believe which makes a deal of 70cash, % and immediately look attractive.
Obviously, you can consider to market the house yourself, saving the price of a broker, but market statistics reveal that over 80% of FSBOs (On The Market By Owner) end up utilizing an agent anyway, and people who do sell the home themselves, gain a lower price than the agent might have done. This really is partly since the buyers understand that the owner is saving agency discount and commissions that through the offer price.
When a private investor covers buying your house in 7 days, this is just one of the methods they can get it done. At first glance the offer may not seem to be very generous, once you take into account the variables we have discussed, it can start to look like a good deal, even though but as you can see.