Now let’s get one thing straight: most of the time, when you see an ad that says “We Buy Houses,” it is rare that the person or business that placed the ad buys your property. Most of the time, your phone number and the conversation of your call is recorded, stored, and marketed to dozens or hundreds of other people looking to get a great deal. This is what happens when you interact with a marketing or list-building company. Once you make your first call, people will continue to call you daily or weekly for months or years afterward, even when you sell your property. You’re going to want to avoid this outfit or if you call them, wear a disposable number.
The next variety of entity is what we will call the middleman. These are typically people who have recently attended a boot camp, class, or seminar on getting rich in real estate. In many cases, these people conduct business for a period of two to four months and then come to a complete stop without even helping anyone. You can usually see these people with their handcrafted bandit signs on the side of the road, cheap advertising brochures, or business cards printed with a view. Their ads vary in verbiage, from “BUY HOUSES” to “Sell your house fast for cash.” If you contact this person, you will notice that he sounds nervous, unsure of himself and completely ignorant about everything related to buying a property. If you end up working with this person ninety-nine times out of 100, you will waste time and not even sign a contract. Especially in this particular business, if you are facing a pre-foreclosure, time is of the essence and you need to work with someone who understands what you are doing. What they are trying to accomplish is drawing up a contract for the property and reselling the contract before closing the deal. There are very few people available in the market who know how to do this successfully. You can distinguish the novice from the experts by what they know and how confident they are over the phone and when and if you meet them in person.
Next on the list are Real Estate Investment Trusts, also called REITs or hedge funds. The chances of you meeting this type of group or someone representing them are slim or nil. They usually deal with experienced wholesalers and people who buy properties at a deep discount and resell them very quickly. They normally pay between 85 and 100 percent of the real value of the property in its condition. These sets are intended to buy and hold for the long term. You would probably be better off negotiating with this entity because they buy with all cash, they are very easy to deal with, and they are serious buyers. Unfortunately, they are extremely difficult to find and you will have to trust the people who actually market the shopping services in order to benefit from their activities.
In addition to everything I have listed above, we are now going to visit construction companies or real estate development companies. Depending on the market, these people may pay a premium for their property, but in most cases they would get a big discount. They are primarily interested in properties that should be completely renovated, lots that have development potential, or properties that will need to be destroyed. These real estate construction companies are easy to deal with, but they are also in business to make money and will never offer the full retail value of your property. These entities are also difficult to find, but they are not that difficult to find in the mutual fund.
Lastly, we have individual cash buyers. Some individual cash buyers like to market property and will actually buy a property for cash, but it should make sense to them as many are in business to make a profit as well. There are others who are people who simply want to buy a property for themselves and their families and have the cash to do it. It’s rare to find someone like that, but when you show up and offer something for your property, it’s best to take it seriously. When you speak to an individual cash buyer, you will know because the same person you speak to is the same person who will see the home and buy the home from you. This would be an ideal situation and you should learn to identify these individual cash buyers.