February 2021- Issue 42

What a February this has been!

Living in Texas is an adventure. The weather can make it an unpleasant one at times, for sure. But moving somewhere with a perfect climate (surely there are such places, right?) is not an option for most of us.

So, while we need to classify the Texas weather as one of those things we must accept, staying in a home that doesn’t meet your needs and make you happy usually isn’t.

Give me a call & let’s discuss it.

If you’re thinking about selling and you get one of those “We buy houses” letters in the mail, and you’re tempted, stop, think, and call me before you act.

That’s what we’re discussing in this month’s article.

Wishing you all the best as this month comes to an end.

xo-

p.s. - please share Harmonious Home Adventures with friends and family (everyone deserves to love where they live!). Just hit the "forward" button on your email. They can sign up here:

The short answer: people who want to use your most significant asset to increase their profits.

Now, don't get me wrong. I'm all for people making money. But there is a key component missing when one of these real estate businesses facilitates your transaction rather than a Realtor: a Realtor has a fiduciary duty to you, their client, to act and give advice in your best interest.

iBuyers, wholesalers, and flippers have only their own interests at heart, no matter what their marketing materials might say.

Let's start with flippers, who are the most direct and least...shall we say, problematic of the trio. (Full disclosure: my husband and I have purchased, renovated, and sold several homes--some of which we have lived in, some which we have not. I guess you could call us "flippers.")

Flippers buy properties that need some love, do (or contract) some remodeling and then re-sell the house at a (hopefully) significant increase over what they paid for it. It's a pretty straightforward process.

Usually, they don't mind working with your agent and they base their valuation of your home on its actual condition and circumstances. Sure, they want to acquire the home for the lowest price they can, but the sales transaction typically is an up-front, open negotiation.

As with anything, there are good flippers, and there are bad flippers. Some do quality work, take pride in the final product, and work to maximize a property's value. Some don't do any of those things and simply "slap some lipstick on the pig," as the saying goes.

Flippers usually aren't a direct problem in the sales process. But the fact that they exist in considerable numbers has helped give rise to another category of facilitator that is not so benign:

Wholesalers are real estate middlemen who act as a conduit to funnel properties to investors like flippers and those who hold properties on the rental market.

Wholesalers make money by severely undercutting the price of the homes they buy, then selling the property to flippers and other investors at something close to the actual market price.

Chances are pretty good that you've received letters or texts or other communications from wholesalers asking if you want to sell your home. They promise that they'll give you the best price for the property--sometimes even naming the price--save you realtor fees and closing costs, and make the process as painless as possible.

Here is a picture of just such a letter that my husband and I received on one of our rent houses:

The home they are offering $117,000 for has a conservative fair market value--as is, with no sales preparation--of $235,000.

Wholesalers are "here to help" for sure; they're here to help themselves to your equity. It may be that they can close the transaction faster than would happen in a traditional sale. But saving you money by eliminating realtor fees and sales expenses? Don't be fooled. They are recovering that money and a great deal more out of what should be your upside.

If you receive one of these letters and are tempted, call me. I can do a complimentary market analysis of your home and give you the information to make an informed decision--not one calculated to maximize a wholesaler's bottom line.

The Internet Age has produced a phenomenon of virtual real estate sales: ibuyers.

iBuyers use sophisticated algorithms to select and set prices for homes without taking into account in any real sense the condition of the property. I say "in any real sense" because the algorithms account for condition probabilities, as well as things like (I'm not kidding) how likely you are to want to sell.

The ibuyer has a locally licensed branch that is a broker, so after it purchases your home, it will put it on the market and re-sell it.

iBuyers have estimates readily available online for virtually every property. Since ibuyers operate nationwide and have enormous volumes, their profit margins on each property don't have to be as wide for them to make money. A lot of money.

The value estimates that ibuyers make (and will offer to purchase your home) are often far more in line with fair market value than you will receive from wholesalers. For instance, one popular ibuyer estimates the value of the property mentioned above--that the wholesaler wanted to buy for $117k--is $227,800.

Closer. Not quite there, but closer.

As we've discussed in past issues of Harmonious Home Adventures, if you want to maximize the value of your property, there is no substitute for the individual attention of evaluating the actual condition, determining precisely what repairs or modifications should be done, and staging the property so that they buyer imagines themselves living there.

The difference that makes?

If we were to list the home we've been discussing, properly prepared and staged, the list price would be $260,000. And I have no doubt that it would sell with multiple offers, perhaps for above asking.

So, if you're thinking of selling, give me a call, and let's talk about your options. No pressure, no hype. You deserve the best information--not just whatever will maximize someone else's profits.

I'll end with a picture of some flowers, not because they're particularly pertinent to anything, but just because they're pretty.

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