Aug. 15, 2018
If you own a property in the Phoenix Valley and specifically the South East valley (Queen Creek, Gilbert, San Tan etc) you have likely received an "offer letter" or "instant offer" to purchase you home. Have you? If so, it likely touts "immediate cash" or "fair market offer" and denigrates the fees of REALTORs.
In the short video below I talk about an actual offer and the numbers they provide, the photo of the letter and explanation of the numbers below.
Unlike some REALTORs I don't believe the senders of these letters are evil nor do I believe they are going to fundamentally change real estate... in fact, there are times it MAY be a good choice for an owner. My focus is on being sure a home owner has the right information to make a decision that actually helps them to reach THEIR GOALS.
However it is important to remember why anyone spends the time and money to write tens of thousands of these offer letters? Because they can make money! Nothing wrong with that but do you want them making it off YOU?
So here is the actual offer presented to me.
Let me start by going through each line/number so it is clear that they only present what they want to show you, with no explanation and there is no negotiation - "take it or leave it" is what they said.
A. OFFER/CONTRACT PRICE: The first number is their offer to purchase. Notice the $235,300 is listed in column 1, which is their offer. They also use that number in column 2 for a traditional home sale. NOTICE their price is NOT negotiable and they PRESUME to tell you a REALTOR would list your home at the same price. NOT LIKELY.
FACT: The Offer Letter is NOT negotiable AND as a REALTOR I would list this home for thousands more.
B. SERVICE CHARGE: This line is the FEE the offer company is CHARGING YOU for the privilege of having them buy your house. What EXACTLY do they need over $16,471 dollars from the owner for? And it is NOT negotiable!
C. AGENT FEES: They even admit that these fees for working with a REALTOR would be LESS than the offer letter Service Charge. Plus they don't tell you that agent fees are negotiable, so they decided what this number was for you!
FACT: The offer letter Service Charge is NOT negotiable (and higher) going to someone who works for their own benefit... Agent fees are for the Agent to represent you, that agent has responsibility as a legal fiduciary to you and will market & negotiate for you. Plus an agent only gets paid if they help you reach YOUR goals.
D. REPAIR COSTS: Notice this is TBD or To Be Determined. Interesting it states they may request repairs but they call it "repair costs" because what the prefer to do is come in later with a reduction to the offer price to cover those repairs.
FACT: Someone with the offer letter company will be deciding what repairs are needed and what they would cost. IF you go with an agent (obligated to work in YOUR best interests) they will tell you what repairs would make a difference in getting you more money and likely be able to suggest good local people to do the work at a reasonable cost.
E. CLOSING COSTS: The Offer Letter folks state here it is only $1773 if you go with them BUT they MISLEAD you without any explanation about if you go with an agent by stating it will be $8832!!! I want to be very clear, closing costs when you list with an agent are NEGOTIATED between buyer and seller... AND in this market I don't remember the last time a client/seller who worked with us paid nearly $9000 of closing costs! This is blatantly misleading and self serving on the part of the investor company making this offer.
FACT: People who write offer letters represent their own interests ONLY and demonstrate it with their offers by failing to disclose, deliberately assuming worst case and taking advantage of the fact that no one will tell you different.
THIS IS WHY IT IS SO IMPORTANT TO GET ALL THE INFORMATION. If you talk to a REALTOR they can explain each of these pieces and show you real numbers. In this particular example, even with them admitting their service charge is more than typical agent fees, they are still showing you an estimated proceeds that is to the wrong side by over $15,000 dollars which they know adds to their own profit AT YOUR EXPENSE!
If you are reading this you are on my REALTOR website where there is other information. Myself and my small team of agents has served over 600 families and we have over 150 reviews on this that you can peruse.
We can show you an offer to sell without marketing/showing.
We can show you how to get top dollar in the shortest amount of time. (right now it is a great sellers market!)
We can even show you customized plans for YOUR unique situations.
We do this ALL while being ethically/legally obligated to do so honestly and transparently. WHY would you consider taking an offer from someone who has no obligation to consider your well being and will not give you alternatives to compare? What really matters are YOUR goals!