With housing supply still scarce, some real estate agents and speculators are trying to gin up sales by blanketing neighborhoods with offer letters. If you see one of these in your mailbox and you’re one of the statistically few people who is actually looking to move — or if your interest is piqued and you might slide into that category — you shouldn’t necessarily jump on the offer at your doorstep. Instead, it’s a good idea to do your due diligence and explore your options more thoroughly.
Different types of unsolicited offers
Offer letters are not all created equal, so before you contact a lawyer about getting closing documents drawn up, it’s a good idea to figure out how serious the correspondence is.
“If you receive a handwritten letter, that would be a little more realistic an attempt at buying a home,” said Angelica Olmsted, an agent with RE/MAX Professionals Cherry Creek in Denver.
A more generic form letter, she added, might be going out to your entire neighborhood and could be an attempt by agents to drum up listings.
And then there are the more predatory versions, where large companies or flippers try to convince you to sell your home for less than it’s worth by telling you it’s in bad shape.
“These letters are intended to create a situation where the homeowners have a loss and they have a gain,” said Doug Sager, a Realtor with the Grubb Company in the San Francisco Bay Area and at the InRealty Group of Better Homes & Gardens Real Estate in South Dakota’s Sioux Empire region. “We’ve seen offers of 50 or 60 cents on the dollar,” he added, “it’s a way to tap into your equity without you knowing what that equity is.”
Why you should still work with an agent
Because the real estate market remains extremely competitive, sellers still have the upper hand in most transactions. “You can make so much more money on the open market,” Olmsted said.
An agent will be able to evaluate your home’s worth and let you know if the letter you received seems like a reasonable offer. Even if it is, it’s still probably a good idea to list your property publicly before you sell, because you could be leaving money on the table if you don’t consider other offers.
“You still want to make sure that you’re represented in the transaction and that your interests are represented,” Olmsted said. “If you don’t have an agent representing you, the chances of you getting the bad end of the deal are pretty high.”
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