Three Steps To Sell That House For Cash

There are three steps you should take before even calling someone to give you a cash offer to sell that house fast.  Following these steps will definitely put a whole lot more money in your pocket when the deal is all done.

UNDERSTAND YOUR MOTIVATION

Most people just think, it’s easy and painless to just let someone buy with cash but as you’ll find out, that’s not the case for most home sellers. In fact recent studies, depending on which one you read, say that approximately 70% of all home sellers will call an ad for a cash buyer yet only a very miniscule number of home seller’s will actually accept the cash offer and it all has to do with motivation.

There’s typically 3 main reasons or motivations causing people to consider a cash offer from an investor on their home for a quick sale.  And if you know where you fit in, you’ll be clear on which direction to take.

Convenience.

How nice is the idea of not having to put a sign in the yard, not having strangers walk through the house at inconvenient times, not having to keep the house clean and then wait on pins and needles to see if you get a decent offer soon.  That sounds good but if your house is in decent condition you’ll see how it’s hardly ever a good idea to take a cash offer. 

With all the ads out there right now from cash investors offering to buy your house right now for cash, the numbers are overwhelming that only very, very few people in your situation actually sell to a cash buyer because of the cash buyer model of buy as low as possible and sell high. 

The numbers just don’t make sense in the end.  Usually the cash investor is looking for at least a full 30-60% upside when they resell your house.  Are you willing to sell with that much of a margin?  I don’t think so.

We’ll go over some scenarios to consider in a minute.

Property liquidation

Maybe it’s a probate or trust sale and You’ve been put in charge  of a property to sell like maybe mom and dad’s house.  It hasn’t been updated since the 80’s and there’s no money to fix it up and you have a life to live so you’re not spending all your extra waking hours cleaning and fixing the house. 

The simple solution is just to dump it off to a cash investor and let them take care of the cleanout and rehab. 

However, as a specialist in the area of Trust and Probate sales, I have revealed to my clients time and time again how to have the house rehabbed or prepared for sale by others that is convenient and without any upfront costs. 

This can result in a significantly higher sale price and likewise a much, much higher distribution to the heirs.  And honestly, as the Personal Representative of the home, this should be your goal because if you just dump it when there are other options, the other heirs could say you didn’t do your job as the Personal Representative and hold you accountable and no one wants that.

Outright desperation

I’ve worked with people who have had every form of desperate situation.  Everything from facing foreclosure,  bankruptcy, job loss, death of a loved one and even people who have gone to jail and they needed to sell their house quickly. 

People in this situation are usually the most vulnerable and are often taken advantage of by cash investors.  They see you are desperate and make you a super low ball offer, promise to take care of everything and close in as little as 7-14 days. 

How nice… but people in this situation usually make very poor emotional decisions and give away a huge amount of their equity, way more than necessary, in exchange for that speed.  Yet if they just slowed down a little bit and took more of a business approach they would have a much better result.  I’ll talk about this after I cover the next two steps.

So understanding your motivation before you call a cash buyer can change the game significantly in your favor while still keeping things convenient.

REHAB THE HOUSE WITH $0 UPFRONT COSTS

Before selling to an investor Consider having it rehabbed  with no upfront cost  to maximize your profit.

Most home seller’s don’t realize this but there is a way to have any home rehabbed and turned into a dream home without any upfront cost whatsoever.  Everyone knows that a home in tip top condition, in any market, will net the home seller way more than if they sold it as a fixer upper. 

We have had properties see upwards of 6 times more profit than if they would have sold as a fixer upper.  Everything from full blown kitchen remodels and bathroom additions to roof replacement and new windows.  But, you don’t have to have a major fixer upper for this program.

Maybe you just need someone to help declutter and put your stuff into storage so it shows well or maybe it just needs a little fresh paint and some flowers out front for curb appeal. 

This way you can confidently list the home for sale and know you’ll get maximum value or even if you still sell your house for cash, you’ll be able to negotiate for top dollar.

You can see some great case studies and learn more about this program at FullPriceFixer.com

GET CASH BUYERS TO FIGHT OVER YOUR HOUSE

One of the biggest and most expensive mistakes seller’s make when seeking out a cash offer is to take the first cash offer you’re presented with.  Don’t do it.  You’ll be pressured to take it, but don’t.  Just tell them you need to think about it.

You see cash investors do what investors do.  They try to buy low and sell high.  So aggressive cash buyers are going to offer you 30% to 60% below the actual value of the home.

And on top of that they’ll also try to deduct any estimated repairs.  So they’re basically convincing you to not only sell at a discount but also to absorb the cost of the repairs that they are planning on doing.

Oh and be warned, they’re really really good at justifying that decrease in value and convincing you that they’re doing you a favor by taking these problems off your hands. 

I have other videos where I’ve discussed this in detail.  I’ll show you what I mean in a minute.

Oh, another warning, they’re super duper friendly. No this is not a good thing.  It’s a type of manipulation. 

I mean why would you  give a hundred thousand dollars or more of your equity to someone who’s mean?  You most likely wouldn’t. 

In fact I was listening to an investor brag about how he got a home for almost $200,000 below value because while he was talking to the lady he helped her do the dishes and she said, “Well because you’ve been so friendly, I’ll go ahead and sell to you.”  Bad Bad Bad emotional decision on her part. 

And even if you think you’re a great negotiator and you don’t think you’d fall for it, think again.  It happens every single day.  They’re good.

So the simple solution… Get cash buyers to fight over your property. 

There’s no shortage of cash buyers out there.  You probably see their ads all the time. 

Now, If you want to do it yourself here’s how.

1. Make an appointment with every single cash buyer you can find.  Have them come to your house and look at it and make an offer but DON’T SIGN ANYTHING. 
   
   By the way if they won’t actually come look at the home but still send you an offer, don’t even for one second consider their blind offer.  All that means is they’re going to try to renegotiate with you later for much less once they actually see the property and claim they wouldn’t have offered as much if they knew about all the new things they find wrong with it. But now you’re locked in so you don’t have a choice. 
   
   Also, don’t tell them yet that you’re meeting with other cash buyers.  You’ll be surprised at how many of them will just never return your phone call because they don’t want to compete with any other investor.  They just want to low ball you and steal it from you with no problem.  Now don’t get me wrong I actually enjoy working with most investors in my database but there are more unscrupulous investors than there are those who are fair and reasonable.
   
2. Once you’ve received a minimum of 6 offers but ideally 10 or more, put them in order of lowest to highest. 
   
3. Call the lowest offer and tell them you have another offer that is higher and tell the the highest price you have (or if the number is not high enough in your opinion, just make up the number you’d be happy with as a minimum.  Remember you’re negotiating for you and your family and you don’t owe that investor anything.)
   
4. Ask them if they’d like to adjust their offer.
   
5. Call the next investor and continue the process and allow all of them the opportunity to increase their bid.

If the numbers keep going up, then put the offers in order of lowest to highest and do it again.

Keep going until you have it down to 2 or 3 who are fighting for it. 

Pick a final number you would be happy with and call all three and tell them that the final number is $xxx,xxx and whomever is willing to accept that first along with a $25,000 non-refundable deposit will get the property.

So for a little work over a couple hours or maybe it will take a couple of days, you have just put a lot more money in your pocket.

Or If you want an easy solution to get investors to fight over your home, visit MultipleOffersUSA.com

They’re a free partner site and have access to hundreds of the top investors across the country that will fight for your home and the showings and bidding is all managed by them and their partner agents.

Valuable Example:

Now, To help you understand the importance of this approach, we’re going to look at some simple numbers just to give you some perspective.

A home in North Tustin CA was a trust sale.  The after rehab value (ARV) was approximately $1,125,000.  But the home did require a significant update.  It needed a new kitchen, new bathrooms, flooring, paint inside and out and some landscaping.  So obviously it would never sell for $1.125,000. 

The personal representative of the Trust (the seller) saw an ad for a cash buyer and called.  The cash buyer showed up, promptly and eagerly made an offer of $759,000 with no closing costs or commissions. 

So the net proceeds would have been $759,000.

This actually sounded good to the seller and after a few days of sleeping on it, he was about ready to sign on the dotted line. 

Luckily, a close friend of his suggested he should just have a chat with me just to make sure. 

After I visited the property and did the necessary research I determined that the property should sell for not a penny less than $850,000 even in it’s current condition. Even though he had a hard time believing it would ever sell for more than the $759,000 offer, he reluctantly agreed to let me help him.

After a vigorous battle between the investors I brought in, we settled on a sale at $877,000.  That’s $118,000 more than the original $759,000 offer.  The seller was blown away and needless to say very happy.

So the point of this is that your house is most likely worth quite a bit more than you think when you are dealing with cash buyers.

Important Final Tips

Let me wrap up with these important tidbits to prepare you if you decide to go it alone.

There’s a few things that most investors know and are trained on that they don’t want home seller’s to know  … until now.

1. They know the odds are,  you’ll only meet with one investor. 
   
   Statistically most home seller’s will only meet with one investor and not even bother to call other investors or seek other options.  And they know it. 
   
   That’s why they fight to be that one ad for you to call on. 
   
   Most people only meet one investor because most seller’s are used to the concept of selling with a real estate agent who is usually trying to push the price as high as possible to get a bigger commission. 
   
   So when a cash investor tells you that because of the condition of the home, and all the repairs needed, that they’re doing you a favor by taking your beat up house off your hands and you tend to believe that’s the best offer you’ll get.
   
   Remember, unlike an agent who works for you, investors DO NOT have YOUR best interest in mind. They owe you nothing and are solely focused on making as much profit as possible despite the position it puts you in.
   
   So you either send them away disappointed or worse yet you believe them and accept the offer.  Well, we’ve demonstrated that’s not the best option.  Get those investors fighting over your house and you’ll increase your profit.
   
2. Next, they are counting on the fact that you will most likely make an emotional decision because either you’re desperate, or you’re ashamed or embarrassed because of the condition of your house and you couldn’t possibly put it on the retail market and risk having strangers see it. 
   
   Again they’ll tell you that they are doing you a favor by just getting you up and out of this house in no time and none of your neighbors have to know a thing, sparing you the shame of living like you have. 
   
   Awww, how nice of them.  That embarrassment just cost you $150,000. I don’t know about you but there’s no embarrassment that’s worth that much. Trust me, you’ll get over it with a bigger bank account.
   
   Instead, get your home fixed up before you sell with no up front costs so you can move out with pride and a whole lot more money in your pocket.
   
3. Oh and this one.  They’ll justify stealing your house by saying that you don’t have to pay commissions or closing costs.
   
   Look I know for a lot of seller’s when they sell their house they look at the commissions and closing costs and honestly it can be shocking. 
   
   But when you actually break it down you realize that paying those closing costs and commissions they are usually the lesser of two evils. 
   
   For example, In the previous scenario, the seller paid a total of 3 1/2 total commissions (1% to us as a listing fee and 2.5% buyers commission) and approximately 1% in closing costs for a total of 4 1/2% which I recognize is still a significant amount of money. 
   
   Now like most cash investors, they were making their offer with no closing costs or commissions which sounds great.  Yet they were happily going to take about 30% -60% of the value of the home in comparison to the 4 1/2 % in commissions and closing costs that the seller paid.  Which one would you rather pay?  30% or 4.5%?  It’s simple right?  Don’t fall for it.

So in the end, selling your house to a cash investor may or may not be the best option but at least you know what to look out for and there are other options.