It seems that, as of late, there hasn't been a week when I didn't find a letter from some company in my mailbox that is "generously" offering to buy my house real fast, and for cash, and I could even avoid any fees and commission! They'll give me an offer right over the phone! That last line alone should have any seller who is receiving similar letters on alert. Proceed with caution (if at all)!
Nobody can give you an accurate estimate of your resale value over the phone by solely relying on AVMs (automated value models) and without ever setting foot in your home. The information that is publicly available and is the basis of these AVMs can be (very) wrong. My property is missing the number of bedrooms in some databases, for example. The AVMs also don't consider any recent improvements. Setting a realistic price range includes knowledge of the neighborhood and comparable properties, and making adjustments for upgrades (or lack thereof) and special characteristics (such as privacy).
Years ago I wrote a post about one reason why online estimates can be way off. After I refinanced my home, I discovered that it was treated like a sale which, since my refinanced amount was well below the appraised value, skewed the values of not only my home but the entire subdivision for the AVM used. Refinances do not play a role when determining property values.
Quite often, these kinds of letters target homes that may need a bit or a lot of work, or homeowners that are sitting pretty on a nice chunk of equity. But even if your home is outdated, I strongly suggest you consult an experienced REALTOR®, before agreeing to sell your home to one of these companies that promise to buy it fast and for cash.
Think about it, they are not a charity, but a for-profit business. If they paid you fair market value, how would they make any money?
We are still experiencing a strong seller's market. But, regardless of market conditions, chances are that you'll net more by working with a REALTOR® who will research (and preview) comps, develop a game plan and marketing strategy, and get the most eyes on your listing even if, or especially when, your home is not in perfect selling condition.
Last year I accomplished just that for sellers who sold their family home that needed a lot of updates and repairs. I was told repeatedly that I would never sell it for how much we were asking, but we did, and then some. My clients sold for 73K more than the highest investor bid, plus the buyers paid their share of transfer and recordation taxes, netting them an additional $6,000. It was sold as-is, and my clients did not have to make any repairs.
So sellers, beware of letters that promise an offer over the phone without anyone stepping into your home and trying to entice you "to save on fees and commission". Consult a REALTOR® and you may very well find that you'll walk away with tens of thousands of dollars more.
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