If you’ve received an unsolicited offer to buy your home out of the blue you may be wondering how to respond. If someone wants to buy your house privately, should you even consider their offer? Is it legitimate or a scam? Are there benefits to selling a home privately versus working with a realtor?
Unsolicited Private Offers
There are two types of situations where you could potentially receive a written offer left in your mailbox: First, you could be contacted even though your home is not on the market because a potential buyer has seen your home and is seriously interested. Second, an investor could be contacting you about purchasing your home if it is currently in probate or if you are delinquent on payments. Both situations come with their own unique pros and cons when selling your home.
Working With a Private Buyer: Pros and Cons
If your home is not currently on the market then selling your house probably hasn’t even been on your radar. Read through the letter of intent you received in the mail so you can see how serious the potential buyer is and if you’re even willing to entertain the offer.
A letter of intent is non-binding, it is a way for the interested party to show their desire to purchase your home based on the terms that they outline in the letter. The terms you can expect to see in a letter of intent include the offer amount, commission percentage (if realtors get involved), amount of Earnest money and the inspection and closing deadline.
These letters can be sent by a private person or by a realtor on behalf of a buyer. These letters demonstrate the serious interest of the buyer because they’ve usually done their research and are ready to buy with a fair market offer.
If the offer comes from a private buyer then you are looking at a unique set of pros and cons to consider outside of just the dollar amount they have offered:
Pros
A realtors commission can be between five and six percent of the homes purchase price. While these numbers are generally worked into the loan, those fees do cut into the profit.
Private buyers that seek you out are generally ready to make an offer and buy right away. This can make selling your home potentially pretty quick and easy
You have more control over contracts and terms.
Cons
You miss out on working with a knowledgable real estate agent who can help with contracts, legal terms and making everything go smoothly. Unless you have experience with real estate contracts this could be a major drawback.
No middlemen help negotiate terms and price which could be a pro if you’re great at negotiating and communicating when the stakes are high, but can be a big con if you’re not experienced or enjoy negotiating.
With a private buyer there is no one to guide you through all the closing process steps and procedures.
Working with a Private Buyer who is Also An Investor: Pros and Cons
If you have inherited a home that is now in probate or if you are delinquent on your mortgage payments then an investor may reach out to you in the mail to express an interest in purchasing your home.
Letters or mailers from investors are not official letters of intent, they recognize that your situation is unique and they have many different options and solutions they can present to you if you contact them about purchasing your home. For example, Gary with Gary Buys Houses will allow you to stay in your home for a time after he closes on the home so you have time work out new living arrangements. This type of flexibility is best worked out when you contact the investor to get more information and they can tailor the offer to you.
If you receive mail from an investor about purchasing your property then your first step would be to do your due diligence and research their business online. Reputable investors will have an online presence with customer reviews and lots of information on how their process works. There are pros and cons to working with investors as well:
Pros
Investors can make cash offers and close quickly. Depending on your situation cashing out and closing soon could save your credit and get you out of a bad financial situation quickly.
Investors usually buy your home as-is — no expensive repairs, cleaning or updating needed.
Investors are flexible. They aren’t planning on moving in to your house so they can be flexible with the terms and tailor their offer to you.
Investors are private buyers who are well versed in contracts and legal processes, you’ll get the benefits of working with an experienced home buyer without the fees of involving a realtor.
Cons
Depending on how much money you need to make from the sale of the home an investor might not offer what you need. They are purchasing the home as-is and will do all the fixing and updating needed to sell the home for a profit so they make a fair cash offer that may or may not be enough in your situation.
Selling a House Privately
As you can see, selling a home privately, without outside help from a real estate agent, comes with its pros and cons. Selling privately could be the perfect solution in your situation, especially if you’re working with an experienced investor like Gary. Contact Gary today to see what kind of flexible terms you can work out and receive a fast cash offer on your home.