Case Study: Why You Should Sell to Me
Yes I know that real estate investors have gotten a bad name.
I’ve been called a shark, a vulture, and a whole lot of other things that I can’t repeat here.
Now I don’t mind being called names. Not a bit actually. If you could experience even half the joy I’ve seen in the faces of the folks that I’ve helped get cashed out of their estate properties quickly, you’d understand why.
What I’ve found, though, is that much of it stems from the belief, or fear really, that my “diabolical plan” is to rip people off or steal their properties from them while they’re grieving.
Fortunately that couldn’t be further from the truth.
You see, there are many situations where it makes sense to sell to investor rather than sell through a real estate agent. Some of those situations include:
- Homes that haven’t been updated in the last 5-10 years. Coming out of the real estate crash, buyers were conditioned to expect homes to be updated and in spectacular condition. If a home isn’t, then it will sit on the market. That’s not to say that it won’t sell, because it can, but it will usually take a long time to do so.
- Homes that have a lot of furniture and personal effects that need to be removed.
- Homes in need of moderate to extensive repairs.
- Homes that simply need to be sold quickly, for a variety of reasons.
In each of these situations, it makes a lot of sense to sell to an investor like me. You’ll get cashed out faster, and you won’t have to maintain a home for an extended period of time.
But as much as I try to explain this, the message doesn’t always get through.
I had a situation unfold recently that makes my point – that it makes sense to sell to me in some situations – and I wanted to share it with you as a case study on why it makes sense to sell to me.
The Buck Street Case Study
This is a house on Buck Street in the city of Taylor.
I sent the personal representative a letter on September 12 expressing my interest in the home.
She called me on September 17th. We briefly discussed the condition of the house and the selling process, and as I always do I asked her if she knew how much she wanted for the house.
She replied that she wanted “as close to $50,000 as possible”.
I asked her how she came up with that number, and she said the internet. And specifically that Zillow and Trulia both said that was the price that homes in the neighborhood were going for.
I tried to explain how inaccurate those sites can be, but she stuck to her guns on the $50,000. She also told me that since she had received several letters like mine, she “didn’t think she would have any trouble at all getting her price”.
Since I hear that quite often, I still made an appointment to see the house that next Saturday, September 20th.
My partner met her at the house and got a good look at the inside and outside. It was clean but very dated. The plumbing hadn’t been upgraded to copper, and it was a 2 bedroom with no basement, all of which made the house somewhat less desirable in the Taylor market.
So based on those factors and the overall condition of the house, we made her a cash offer of $18,000 and said we’d close by the end of September.
That meant she’d be completely free of the property, have cash in hand, and have the probate file closed – all by September 30th.
Offer Rejected – Property Listed
Well she rejected our offer and she seemed a bit insulted by it. She also maintained that she was certain that one of the other investors that she had scheduled to visit would give her the price she wanted.
So I kept an eye on the property.
Nothing happened by the end of September.
October came and went. The weather got bad, but no movement on the house.
I sent her a follow up letter at the beginning of November and followed with a phone call.
Finally on November 21, I saw that the house was listed for sale by a real estate agent – for $29,900. Still way too high of a price for a house in that condition.
As I continued to keep an eye on the listing here’s what transpired:
- On December 2nd she lowered the price to $24,900
- On January 7th she lowered the price to $19,900
When I saw the drop to $19,900 I called her again and told her that our $18,000 offer was still valid.
She rejected it. Again.
Then finally on February 10th the house went into “pending” status, which means she had accepted an offer on it. For $19,000 it turns out.
The Story Behind the Numbers
On the surface it looks like she made the right decision by rejecting my offer because in the end she made $1,000 more.
But that’s not the case. Not even close unfortunately.
Let’s dig a little deeper into this to understand what happened.
On the one hand, she could have accepted my $18,000 cash offer and had the probate file closed by September 30th.
On the other hand, she rejected my offer and listed it and made $19,000.
But unfortunately it wasn’t $19,000.
Since six months had passed, it was $19,000 less:
- Real estate commission: $1,140
- Property Taxes for 6 months: $1,200
- Property insurance for 6 months: $350
- Utilities for 6 months: $1,800
- Other maintenance: $500
Or a total of about $4,990 in expenses. And that’s not including any additional legal fees she had to pay her probate attorney to keep the estate open for an additional six months.
So, she made $1000 extra dollars on the sale – but incurred $4,990 in additional expenses. And it took six more months to do so. Not to mention the time, effort, and energy it took to keep the house in showable condition through a Michigan winter while the home was listed for sale.
And in the end?
She walked away with around $4,000 less than what I had offered her six months earlier.
The Bottom Line
I didn’t write this Case Study to slam the seller. Far from it. She did what she thought was best, and I can appreciate that. And not all of them turn out like that.
But unfortunately, with homes that aren’t really in listing condition, it happens a majority of the time.
I know firsthand how emotional and stressful the probate process can be, since I handled my mother’s estate just a couple of years ago. I know the work it takes; I know the pressure that heirs can exert; and I know that the process often ends up being acrimonious and unpleasant.
That’s why my business is focused on eliminating what can be a huge headache in the probate process.
And as I mentioned, I do it in a way that makes sense for both of us.
Based on my own experience, it pained me to follow the Buck Street seller as she carried a house through a brutal Michigan winter, and then walked away with less money that she would have had she sold to me six long months earlier.
I don’t wish that on anyone. That’s the main reason I’m in this business.
So why not give me a call and let’s find out if it makes sense for us to work together?
And I promise – no sales pitch. No hard sell. And no back and forth. Just a fast, fair cash offer for your home.
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