Been receiving mailers regarding cash offers on my home

18 Replies

I've received two mailers in the past week, and others in the past regarding cash offers at market value to buy my property with no hassle on my end.  My question is, what is their strategy in trying to snatch up more property given housing prices are climbing high, and a correction in the market may be looming?  

many of these people are not true cash buyers and are simply trying to tie up your house and resell to an end buyer and playing unlicensed real estate broker

John Thedford, Real Estate Agent in FL (#BK3098153)
239-200-5600

A lot of time they want to flip your home or acquire it at below market value, there isn't a lot of sense in someone spending a bunch of money on mailers to buy your house at market value, therefore they probably wouldn't offer you that.  Also in terms of a correction not everyone thinks one is coming and even if it does its severity may be limited, there are also some investors willing to hold on for the long term that don't care if the valuation fluctuates while they hold.

I'm here trying to look for deals while these guys seem like they're just going for anything.  That all totally makes sense, like the funnel strategy, go as wide as you can, it always narrows down.  

@Yeng Hawj just out of curiosity are these mailers coming to your primary residence? Are they those cheesy yellow letters or post cards? I just curious as to where they are getting your info (criteria).

If you want to vet the seriousness of a “cash” offer, demand 5-10k in non refundable earnest money. I’m guessing 99 percent will laugh at that and will never be heard from again

@Yeng Hawj From the home of the Thundering Herd...

Anyway, odds are you and the "buyers" (quotes intention) might have very different views on the "market value" of your property.  Mailers are always going to be put out there to get a response.  Would you ever respond to: "Let me pay you 70% of market value for your property!"  No, probably not.  So the first step is that they're likely just trying to get you on the phone and figure out what you think the market value is for the property.  If it's not "realistic" then that's probably the end of it.  If you have no idea you'll probably end up, as @John Thedford suggests, with a wholesaler that will try and double-close the deal or sell the contract.  

The real fun, for you, would be searching for the names/companies of the letters and seeing if they are members on BP and contribute in the forums :-)

@Andrew Johnson

Funny you would mention that but so true. I recently got a "cash for your house" piece of garbage from an unlicensed broker here in the area. The irony is that I filed two complaints against them which the state is investigating. If the OP wants to have fun they should invite offers, tell the "buyers" to put them in writing, and state they will think it over for a couple of days. This will give them time to post them here:) Yes-this FRAUD AND SCAMMER is a BP member.

John Thedford, Real Estate Agent in FL (#BK3098153)
239-200-5600

@Yeng Hawj I have been getting mailers like this at an increasing pace. It is odd, that as real estate prices skyrocket higher, I get them at higher frequency. They are just wholesalers who are going to offer you less than half of retail and will just assign the contract over to some other buyer. It is very doubtful they actually have cash to close. It would be interesting if you posted the letter here for us to read (remove your personal information of course).

We get lots every week. Sometimes on properties we bought a week prior the letter showing up. And lots of times from people we buy from. “Market value” and “cash buyer” are usually not the case.

@Yeng Hawj I echo @Caleb Heimsoth suggestion. Best bet: ask for a 5-10k in nonrefundable earnest money. Then wait and hear the sound of crickets. These are, mostly, wholesalers (really dislike the cheesy yellow notes and postcards!) trying to double-close a deal or sell a contract. 

No wholesaler is buying at market value. The business model would cease to exist if they did that. 

@Andrew Johnson Love your suggestion about cross-referencing names/companies to BP members. That would be quite fun. 

@Yeng Hawj

If they indeed follow through on their "Market Value Offer" they're probably asking for the seller (you) to carry the note for many years while they rent it out, or they nickel and dime you on repairs. E.g. If it's worth $500k, they say, "the actual market value is $330k after factoring in all the repairs and work needed to bring it up to market status."

They're not making money paying cash at full price for a house that needs no concessions for improvements.

We knew the market was improving when we started getting them in the mail again after years without them, and now we're getting at least 2-3 per month,  so maybe a sign the market is toppy again.  Some of them are very creative.  I even kept one because it made me laugh, and I told my husband I'd definitely call that guy first if we ever want to sell.  I'm planning on leaving them to my kids, but you never know.  

Seems like a lot of negative downplaying towards wholesalers which is 1) legal, 2) a way that lot of investors feed their families. If it's working for some then why downplay it? Just asking those that have negative opinions on those mailing letters.

Originally posted by @Kevin Powell :

Seems like a lot of negative downplaying towards wholesalers which is 1) legal, 2) a way that lot of investors feed their families. If it's working for some then why downplay it? Just asking those that have negative opinions on those mailing letters.

 Many are operating illegally and violating state laws. Quote a few of them victimize sellers. 

John Thedford, Real Estate Agent in FL (#BK3098153)
239-200-5600
Originally posted by @Yeng Hawj :

I've received two mailers in the past week, and others in the past regarding cash offers at market value to buy my property with no hassle on my end.  My question is, what is their strategy in trying to snatch up more property given housing prices are climbing high, and a correction in the market may be looming?  

 Those could be wholesalers but that is not bad,  in this era, you can find almost all the information you want on the internet,  I have been a wholesaler and also I have sold my properties to another wholesaler, o end buyers,  everyone is important on the Real Estate world.    also asking for 10% non-refundable deposit is out of mind,     just think if you were going to send an offer to buy your next home with a 10% nonrefundable deposit? I don't think so 

(786)-529-4075

@Lynn M. I'm curious to hear about the one you kept. What was on it that you like about it? 

@Yeng Hawj I am partnering with a friend and someone who is an experienced investor and we plan on starting direct mail marketing in a week or two. We aim for sellers who may have a motivation to sell (i.e. highly distressed property that they probably don't have the money to fix). I've done direct mail before and I've had people call me because they were interested in what my offer would be. I asked them a couple questions pertaining to their property. If their property is in good shape and would likely sell on MLS especially in this market. I tell them straight up I won't be able to offer them what they can get for their property. Some people on this post seem kind of jaded by these type of mailings. But marketing is key in any business especially real estate. Unlike what some people are saying please don't try to 'expose' someone because someone told you that it is a wholesaler that is trying to double close. Not everyone who is a wholesaler is a scammer. Direct Mail is a key part of a lot of legitimate investors. Just throw it away with the rest of the junk mail that comes through :).

Direct mail is just a marketing strategy that's been around forever, not sure why you guys are making a big deal about it. Obviously you're one of the 99% who will not respond. But it's the 1% who are in damage control mode due to an imminent foreclosure, divorce, financial problems, etc are the ones who will call. 

To answer OP's question, their strategy is to simply get you to call. It's all about filling up the sales funnel. 

Also asking 10k in EMD is hilarious. A seller did that with me once and I said no, I'll do 2k. He accepted and we proceeded with the deal. I guarantee you if you're motivated to sell, you won't require a high EMD.

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