Are you intersted in selling your own home? Do you need a quick sale? Are you hoping for a cash offer and a quick close?
Well, you might be for a rude awakening since we are seeing tons of wholesalers who are writing unqualified cash offer only to flip the contract to another buyer for a fee.
“wholesaler” is a buyer who has no plan to close the escrow on your house and will flip your purchase contract to another buyer for a fee. So, the challenge facing the For Sale by Owners is to spot the fake offers from the real ones. Here are some clues :
1) Offer Price: Wholesalers often write offers which are below your asking price to generaet themselves an opportunity to create a bigger fee. So, watch out for low ball offers from these wholesalers which claim they can close very fast.
2) Source of Funds: Most wholesalers use funds that are typically sourced from an LLC. In our experience one wholesaler offered us a $800,000 purchase price and when verified the funds, they had only raised $1M and were making offers on 10 homes every months. So, simply because these buyer provide you with proof of funds, you have no way of knowing how many other offers they have written on the same street or zip code in hopes of just securing a contract.
3) Close of Escrow: Close of Escrow (COE) is another strong indicator that you are dealing with wholesaler since they often ask for 30-45 days to close. You can ask your buyer that if they have the cash to close, can they close if you counter them with a 7 day escrow. We bet they will walk.
4) Down Payment: Wholesalers often offer less than 1% of their offer price as their initial deposit. Since they only want to risk very little money in case they are unable to flip the purchase contract.
Finally, aaccording to National Association of Realtors, 28% of the homes sold by their owners were under-priced which is a huge loss.
So, Contact Us if you need help with your Silicon Valley home sale.