Driving around town, I’m seeing the signs more and more. Literal signs, I mean. I see them at busy intersections and even on hydro poles. The wording varies, but the gist is always the same… call us now if you really, really need to sell your home quickly, because we’ll pay cash. Sometimes there is mention of zero fees. Sometimes it’s a little more fear-driven, referencing the way that a Seller can get out of their bad situation. And so forth.
You know, I’ve helped people in very dire straits sell their homes. The stories vary, and so do the outcomes. Life can be hard, and – for a variety of reasons – I believe any one of us could land in a situation where, ultimately, our only way to dig out of a financial mess is to sell our home. It happens, and more often than you might imagine. These are tough situations; heartbreaking, sometimes. And when I see signs like this scattered around town, I won’t lie… it concerns me, and it saddens me.
Why? Because… here’s the thing. If you really do find yourself in a financial situation where you’ve run out of options and you simply must sell your home in order to become financially whole again – the solution is not to turn to someone who wants to “buy your home for cash” and told you so on a public sign.
There may be some economic periods and some locations in which selling in such a way makes sense. But not in Guelph, and not today.
Here are just a few current Guelph real estate market realities to prove my point.
- If you are desperate, your home can be listed on the Guelph market, by a Realtor, within 24-hours. Is this ideal? No! But it can be done. Sometimes these individuals prey on the Seller’s need to divest of a property quickly. Sellers should know that homes can be listed – and sold – in a very short amount of time… but still having been on the market in order to generate the best offer.
- Homes in Guelph are in such hot competition that it’s hard for Buyers to break into the market. Lot value alone in Guelph has risen, and Buyers are looking for fixer-uppers in record numbers and distressed properties are no longer the ones that will linger; in fact, they will sell just as quickly if marketed properly.
- Realtor fees are negotiable, and can vary based upon services provided and, frankly, the Realtor. For Sellers in dire straits, there are Realtors out there willing to reduce commissions for compassionate reasons and out of a genuine desire to help. Maybe not the first one you call – but, trust me, plenty of us place a greater value on sleeping at night than on the size of our pay checks.
- Ontario Real Estate Agents are duty-bound to treat everyone we work with on the basis of fairness and honesty. When we work with Buyers or Sellers on a client basis, we are ethically and legally bound to protect their financial best interests. The private investors who want to buy your home for cash? They aren’t.
- Oh, and about that. Most Guelph homes right now are selling within a matter of days – and most are selling with no conditions. That is called a ‘cash offer’ in real estate lingo. So, if you list your home on the MLS with a Realtor, you are likely to get that cash offer, anyway.
- Fair market value? What is it? The only way to truly test that out is to list your property on the MLS, and to open the home up to Buyers and their Realtors. The market will speak to the value of your home, and you might indeed be surprised at the outcome.
- The notion that you’ll save on fees is 1) not wholly accurate; and 2) a red herring. First, without a Realtor, your legal bills will rise because you’ll be asking your lawyer to undertake many activities that a Realtor normally would. Secondly, with the trend in Guelph real estate sales today, and homes selling so far over asking in so many cases, it’s quite likely that your Realtor fees will be offset by the difference in sale price on the MLS, vs. by the person who drove around planting signs on street corners.
- Finally, as to what “fair market value” is in Guelph – who knows? The market is so hot for Sellers in Guelph that all we can do as Listing Agents is research comparables and do our best with a reasonable price and solid marketing strategy. From there, even when we price it “fairly,” a home can go in wild competition right now. Offers well in excess of $50,000 over asking have become common, even with properties that are in rough shape.
I should be clear about the kind of real estate investors I’m taking aim at, because most are not involved in this kind of pursuit. A significant part of my business involves working with investor Buyers and Sellers, and they are fantastic clients. However, this new type of investor – probably trained by someone in the USA where this business model flourished in the post sub-Prime fiasco – is a different horse in the race.
In the last year, I have had meetings with a few people whose purchasing strategy involved soliciting home buyers directly. The premise was this: On their behalf, I would identify properties that looked distressed or otherwise had telltale signs that the owner was financially in over their head. I’d then approach the Seller directly, and tell them I had a cash buyer ready to get them out of their home. The “win,” I was told by these various investors – same story, probably same investor seminar series – was that I’d represent them on the purchase and get a commission. And, maybe, I’d even be so lucky as to sell it for them a few months down the road when they flipped it for profit, so long as I worked at a reduced commission, of course.
I said no, and it took me seconds. I’ll tell you what I told them. If I come across someone who is in those kinds of circumstances, and indeed they want to sell their home – I will help them. But helping them means getting them the best price for their house. And that happens by exposing a property to the Buying public, marketing it, and letting interested parties compete over it.
So, no, I’m not door-knocking and asking people in dire straits to sell their home for cash. And you know what? I sleep soundly.