I received a Yellow Letter

Investor · New York City, NY · Member since 2014 · 370 posts · 85 votes

Hi, I received a yellow letter and the person offered cash and the range was 85-100% of market value(just got it appraised). Am I missing something here? I thought the idea was to offer 70% of market value. I am in a hot seller's market however. I am not motivated but maybe the property is worth more than I thought.

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Henry Lazerow

Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes

3mo

Those people mass send those and will just waste your time and cancel if they are not getting it for a huge discount. Those offers are for suckers.

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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3mo

Many times those yellow letters will be contingent upon an inspection or some other type of information. My recommendation is not to accept an offer, but to let them know that yes, I'd consider selling, but I need a solid offer with no contingencies, and then see what they do.
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Henry Lazerow
Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
3mo
Those people mass send those and will just waste your time and cancel if they are not getting it for a huge discount. Those offers are for suckers.
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James Mc Ree
Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 934 votes
3mo
Go to market if you are genuinely interested in selling. You will give all buyer prospects visibility to your property, which generates competition, especially since you are in a hot market. Otherwise, you give the yellow-carder a huge sole bidder advantage and you have nothing to compare to.
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Travis Goodwin
Wholesaler · Charleston WV · Member since 2026 · 219 posts · 121 votes
3mo
70% ARV isn't a universal rule. Different investors have different strategies and buy boxes. I'd treat the letter as an invitation to talk rather than a guaranteed offer and compare it against what you'd get listing it on the market.
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Ken M.
Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
3mo
Quote from @Les Jean-Pierre:

Hi, I received a yellow letter and the person offered cash and the range was 85-100% of market value(just got it appraised). Am I missing something here? I thought the idea was to offer 70% of market value. I am in a hot seller's market however. I am not motivated but maybe the property is worth more than I thought.
It isn't an offer until it's in writing. Anything goes until that.
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
3mo
They do this for a living. You don't. If you actually want to sell, list the house and make them bid on it....why wouldn't you?
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Mick Wadley
Lender · United States · Member since 2026 · 14 posts · 6 votes
3mo
Everyone above is right but here is the thing nobody has said plainly yet.

That 85-100% of market value range is a marketing number, not an actual offer. It is designed to get you to call. Once you call they will inspect, find reasons to adjust, and the real offer will land a lot lower.

The 70% ARV rule exists because wholesalers need room to assign the contract to a flipper and still leave enough margin for the flipper to rehab and profit. 85-100% of market value leaves zero room for any of that. So either they are not being straight with you upfront or the range is a teaser to start a conversation.

Chris and Bruce are spot on. If you are genuinely interested in selling:

List it. Hot seller's market in NYC means competition drives the price up not down. One motivated wholesaler with no competing offers is the worst negotiating position you can be in.

If you engage them at all tell them you want a clean written offer with no inspection contingency and a 14 day close. Watch how fast the number changes.

You are not a motivated seller so you have all the leverage here. Use it.
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Igor Ganapolsky
Englewood, NJ · Member since 2018 · 461 posts · 84 votes
3w
Mick nailed it — the 85-100% range is a marketing number designed to get you to call. But there's a bigger reason that number is so high: the person who sent it has no idea whether you're actually motivated or not.

That yellow letter was mass-mailed to hundreds of property owners. They don't know if you just got appraised. They don't know you're not motivated. They don't know anything about your property or your situation. They're casting a net and hoping 2% of recipients call back.

That's the old wholesaling model — spray and pray. And it's exactly why the offers don't make sense. When someone mass-mails 10,000 yellow letters at random, they need the 2-3 who respond to be deeply motivated sellers so the math works. That's why they lowball after inspection — they're compensating for the fact that they sourced you blindly.

There's a different approach some wholesalers are starting to use that makes the yellow letter problem go away entirely:

Before sending anything, pull free county public records and cross-reference three sources on the same property:

1. County Tax Collector — tax delinquent list (financial stress documented by the county)
2. City Code Enforcement — violations with dollar-amount repair costs from county inspectors (physical stress — when an inspector writes "$12K structural repairs" that's repair scope before first contact)
3. County Clerk of Court/Register of Deeds — probate filings, liens, pre-foreclosure (legal complexity behind the distress)

When the same property shows up on all three — tax delinquent AND $15K in documented code violations AND a probate filing — that's converged distress. Three independent county confirmations that the owner has a specific, documented problem.

Now when you reach out, you're not sending a generic yellow letter offering 85-100% hoping someone calls. You're contacting someone whose property the county has already confirmed is in financial stress, physical distress, and legal complexity. You know their specific problem before the first conversation.

Les, the reason that offer range seems off is because it was sent blindly. A wholesaler who pulled county data on your property first would know you're not motivated (tax records are current, no code violations, no probate) and wouldn't waste your time with a yellow letter in the first place.

Chris's advice is right — demand a clean written offer with no contingencies. But the real lesson here is that the best sellers never get yellow letters. They get contacted by someone who already understands their specific situation from county records.
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