Colleen Bennett - Sotheby's International Realty

THE REAL DIRT: Don’t Fall for This Sign of the Times … by Colleen Bennett

November 12, 2017
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This sign was posted along Foothill Boulevard, close to where you live.

LA VERNE, California, November 12, 2017 — You see the signs everywhere. “We Pay Cash for Houses,” “We Buy Houses, “We Buy Ugly Homes.” You see them plastered on telephone poles and freeway onramps. The signs are more ubiquitous than ants at a picnic.

 

Mortgage Manfro

Perhaps, you’ll get a flyer in the mail from one of these “Good Samaritans” who promise you a fast, easy transaction — free of all agents, commissions, repairs, closing costs and fees. (Where do you sign up, right?)

 

And these generous souls especially like to extend a helping hand to people down on their luck — like someone dealing with a divorce, a foreclosure, bankruptcy, death of a loved one, a job loss, creditors or even a house that is falling down or a neighborhood that has fallen on hard times. They’ll take it off your hands, so you won’t have to live with the burden another day.

 

On the surface, the offers seem appealing, but the majority of people writing them are P.T. Barnums (“A sucker is born every minute”) with Sharpies. They’re looking to buy your home at 50 cents, more or less, on the dollar. The sad truth is, the signs keep going up because unwitting victims keep lining up, ready to sell their homes at fire-sale prices. 

 

Now, no one should begrudge anyone else from making a living, but that doesn’t mean letting someone make a financial killing at your expense. No one deserves to be taken advantage of.

 

Yes, you might be in a tough financial spot, but tough situations require good solutions and solid professional advice, not dire, desperate actions where you jump at the first lowball offer you receive and then spend a lifetime, asking “What happened?”

 

Obviously, if you’re at all tempted to sell your home to an “ugly” house buyer, you’re probably in some kind of financial panic, but panic is the last thing you should do or feel.

 

You have options: 

 

Option 1: List your home at a slightly under-market price. This tactic usually brings out multiple buyers looking for a bargain, which could actually trigger a bidding war. And that’s far better than falling prey to one, bottom-feeding, all-cash buyer (or company) who, knowing your situation, tries to hook you with their bait. Always keep in mind that there is a vast market of potential buyers constantly perusing the internet looking for properties like yours, so let the marketplace determine the fair value of your home, not some slick, fast-talking buyer who says he’s doing you a favor.

 

Option 2: Rent your home. Even if the rent doesn’t fully cover your mortgage, it’s better than “giving” away your house. 

 

Option 3: Refinance. Work to lower your payments by spreading your mortgage out over a greater number of years. Or pull cash out, if you have immediate bills to pay. Lenders can do some amazing things, and rates are still historically low.

 

Option 4: Seek government assistance. Government programs like HARP (Home Affordable Refinance Program) and others are available to distressed homeowners. It’s always worth a shot. Since 2009, 3.3 million homeowners have successfully financed their homes through HARP, which expires in December 2018. Those are 3 million homeowners who didn’t lose their house to an “ugly” home buyer.

 

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Financial woes can make people act desperately and foolishly. Before calling some number pasted on a telephone pole or strapped to a chain-link fence, talk to a knowledgeable real estate agent where you live. They should be able to give you a ballpark number on what your house should go for and how long it will take to sell on the market. Realtors also are sworn to a code of ethics, or they can lose their license.

While I understand it might be tempting to cash out of your home at any cost so you can get on with your life, why would you risk leaving thousands of dollars on the table — and that’s after paying a Realtor a commission?  

You’ve heard of “caveat emptor,” better known as “buyer beware.” Well, when it comes to the ugly house cardboard sales pitches promising fast, easy cash, it’s “seller beware.”

Colleen Bennett is a longtime La Verne-based Realtor (Sotheby’s International, CalBRE 01013172). Read her other columns on La Verne Online. You can reach her anytime at 909.374.4744.

 

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