TORN FROM THE PAGES OF REAL WORLD REAL ESTATE...

I had a client call me about a property they owned in Midway Hollow on Bolivar. They said they were ready to sell and they receive letters with offers to buy all the time. They also said they met at the property with a person that buys properties and received a written bid from them. I told them that I would be happy to meet with them and evaluate the offers to see which offer was best.

The vast majority of the offers weren't offers at all. They were non-binding "letters of intent". This sets up a purchase price but does not actually bind the buyer to the property. There is no earnest money or option fee mentioned in the letter of intent, just a closing date. The buyer may or may not show up on the close date. If they do show up, they usually ask for a drastic reduction of the sales price at that time. The sellers usually feel desperate on the day of closing and reluctantly agree to the reduction. Not a good way to sell.

The most secure looking offer was from a company that routinely buys properties. You see their ads all over TV..."no open houses, you don't have to make your bed. No worries. The most convenient way to sell your house."

This company came in with an offer of $360,000. When I ran my comps, I thought I could sell this property with NO CHANGES for $400,000 to $425,000. The sellers were a little leery of my evaluation.

Back to the $360,000 offer. This company says plainly in their ads, "we eliminate the HIGH FEES and HIDDEN costs paid in real estate transactions. In this company's offer, there was no line item cost for "real estate fees" or the 4-letter-word of real estate..."commission". Wow, a $360,000 transaction with NO COMMISSIONS - what a dream!

After looking at their offer contract closely, there was a line item called "Evaluation Consideration" with the amount of $10,800. This was NOT a COMMISSION, or an evil, hidden real estate fee perpetrated by the sworn ENEMY of all sellers - the REALTOR!!! It was just a little "evaluation consideration". Nothing to see here.

So after the "Evaluation Consideration" and the title policy fee, the sellers would net $346,734. I told them I thought I could beat that within 30 days of listing the property. They agreed to let me list it and we went to market for $449,000.

We listed the property on Jan 3rd and went under contract on Feb 2nd for $410,000. Property closed on the 13th for cash. At the sale price of $410,000 the sellers net was $380,816 after all fees (evil or otherwise). This was $34,082 MORE than the easy, no fee transaction they were promised by the "easy transaction buyer".

MORAL TO THE STORY: It is great to evaluate the unsolicited offers you receive, but you have to know the market and know the contracts to protect your interests. These "easy buyers" do not have your best interests at heart, they want to use your property to make themselves rich.