Our real estate market has seen substantial increases in prices over the past few years as well as a limited number of homes available on the market. This has led to an increase in practices that can be detrimental to uninformed sellers. Often times these are the elderly, people that have been in there home many years, estates, or distressed owners. With all the information that is available on line, it is fairly easy to target these groups of potentially vulnerable homeowners.
One way this is happening is that an investor or agent contacts a homeowner who has been in the home a long time and likely has a lot of equity. The investor may offer a cash, quick sale at what appears to be a good price to the uninformed seller, even though it may be tens or hundreds of thousands below the actual market price. With the home contracted at a below market price, the investor then would assign (flip) the contract to another buyer for the market price.
Another thing that can be detrimental to a seller is an agent or potential buyer wanting to purchase the home before it goes on the market. While there may be some benefits to the seller, anytime you limit the exposure of a property to the market, the likely effect is to sell for a lower price.
These practices are not necessarily illegal or unethical, but may be victimizing an unsuspecting or uninformed homeowner. Don’t be pressured or rushed into making a decision. Check with a local Realtor to get a 2nd opinion on what your property is worth. Listen to your gut instincts.
Be wary of anyone that approaches you about a sale you weren’t planning on. Talk to friends or family to get a reference for a Realtor that can give you trusted advice. If you are not sure if the person is a licensed broker, check them out at www.dora.colorado.gov/dre.
If you consider their offer, get advice or representation for yourself. Have a Realtor or attorney on your side. The investor that is making the offer is looking out for their best interests, not yours. If they aren’t licensed brokers, they don’t have to follow the rules of the Real Estate Commission and if they are not Realtors, they don’t have a Code of Ethics to follow.
Remember, exposing a property to the entire market is the best way for a seller to know that they’ve received the best price for the market.