Thinking of Selling your House to an Investor?

I've never done a video like this and this video was a request from one of you, one of my YouTube followers who said, hey Audra, listen, I'm lazy. This is their words, not mine. I have it right here. So they're lazy. And I just don't want to put a lot of effort into selling my home. I'm overwhelmed. I just don't have the time or the bandwidth. I don't have the money. What are your thoughts of putting just the bare minimum in or no effort whatsoever? What are your thoughts about companies who guarantee a quick sale, meaning that they're willing to come out, give you a price for the house and get it under contract with no fuss, no muss. And guess what? I actually got one of these contracts from a very well-known investor that comes out and guarantees the sale of a home. And so I'd like to share my thoughts and something to consider if you are selling your home and don't want to put a ton of effort into it. All right. This is a really hard, hard video for me because all my videos on YouTube is, hey, this is how you maximize the profits in your house. Let me help you make your house shine online because we know that's the best way to sell your home. So I do believe that this follower, what they're asking me is like, hey, listen, Audra, we love you, honey. We know you're right, but we just don't want to do it. So what's the next best steps? OK, so do realize that if you do put effort and you're not lazy, that you typically are rewarded for your efforts. Not always, but for the most part, you are. That would be like you coming to me saying, hey, Audra, I want to, you know, feel good. I want to look good. I want to feel strong. I want to feel healthy, but I don't want to work out and I don't want to eat healthy. Just tell me the balance between what the bare minimum I have to put into looking pretty good. So that's really kind of what the purpose of this video is, is to get pretty good results without putting a ton of effort. It's difficult. It pains me because I know there's so much more on the table for you, but I will do this video just for you. There are always investors. There are always people out there that are willing to buy a house at a significant discount because they get to make money on it. Now, if you are willing to consider something like that, I say be careful with who you partner with. Not every one of those investors are equal. OK, some are better, some are worse. Now, I will share with you a situation that recently happened to one of my clients. Do not fall prey to this. OK, so here's what happened. They called me up and they said, Audra, we found the house of our dreams. I know you're going to kill us, but we reached out to a company called Open Door and they're willing to buy my house in 10 days, all cash. And then I can secure this property. I don't have to buy it contingent. I know you're not loving that, but this is what we decided to do. This is a life choice for us. So can you write an offer for the property we want to purchase? Oh, my gosh. Oh, my gosh. I read every word of this Open Door contract. I will say it was a legitimate contract. Open Door is a legitimate company. OK, they are a for profit organization. However, they're not going to give you fair market value for your home. They're going to be offering you a significant discount because they need to make a profit on when they go to sell the property. So they did offer my client a million dollars for their home, which I thought was significantly below market value. And by the way, this house was in very good condition. They put in fifty six thousand dollars for transactional costs that they expected my seller to pay for. And they also requested fifty five hundred dollars for some buyer concessions for repairs. And this is the key thing to this contract that I really liked. The seller, me, my client could back out for any time, for any reason. You know, that's cool. They didn't get my client like locked into this contract. And I do like that about the company. However, they were offering a very low price. So I asked my seller, I'm like, hey, listen, do you mind if I bring in three investors? Now, remember, anytime you hear the word investor, that means they're going to be offering you low prices to move something quickly. Let me just bring in three investors, see if I can get the price up a little bit for you. Would you mind me at least trying? She said, yeah, sure. So I brought in three investors, one offered one hundred thousand dollars over what Open Door was willing to offer. We closed the deal and we made everything happen. Now, the house hasn't gone back on the market yet, but I guarantee you there's probably another hundred, two hundred thousand dollars that could be made on that property that was left on the table because my client wanted a quick sale. And my clients are thrilled, right? They got one hundred thousand dollars more for their house they thought they were going to get. They're in the house of their dreams. They're celebrating their holidays right now in their new home. And it was worth it for them. If you are selling your home and you have time and you don't want to put a lot of effort into it, then I would call someone like Open Door or other investors to get a quote on what they think the wholesale value of your home is. So get that number, whatever that number may be. Maybe you do an average of all three. And then you hire the best agent you can find. And yes, I do have a referral program. Details are linked down below. We'd be happy to refer you some agents in your area. But please, for heaven's sakes, hire a good agent that can negotiate your deals up above that low ball price. The market's going to bear what the market's going to bear. I promise you that your house, when it's put on that MLS at that low ball price, people are going to flock to it. We can't help ourselves. We're human. We love deals. I promise you, you probably get a hundred people getting into a bidding war, getting your house at market value or above. It's probably going to be much more profitable for you to do it that way. Now, I just came from Marshalls. I don't know if you guys have Marshalls where you live, but it's a discounted store. And I went in there because I'm trying to buy some stocking stuffers. And the line was out the door because everybody wants a deal. Then I went to Nordstrom's and I had to buy my spoiled, rotten little brat son, who's 21. He's a good kid, actually. But there's no line in Nordstrom's. You want to know why? Because nothing's at discount. It's market value. You get things in pretty packages, you get the service. That's the kind of business I like to be in, in my own personal real estate business. But if you're going to offer your house at a discount, then get the maximum you can. And the best way to do that is to put it out there in the masses and let the market bear what the market's going to bear. But you're not going to overprice your house. You're going to list your house below market value and let the market speak. That's the way to do it. There are only three pricing strategies to take to market. Only three. And when I tell you this, you're all going to be like, oh, she's right. So the first thing we're going to do is we're going to establish the market value on your home. You can do that by hiring an appraiser, you know, get a really good agent in your area to give you an idea of what they think your house is worth in the condition that it's currently in, as is condition. Let the realtor or the appraiser give you what they think market value is. Once you know what market value is, you can decide what strategy to take to market, what pricing strategy to take to market. Pricing strategy number one is that you're going to list your house above market value. OK, I hate that strategy. It's never worked for me. So here's market value. Let's say it's five hundred thousand. You decide to put your house on the market for six hundred thousand, thinking that you're going to negotiate down to five hundred thousand. If you do this, you will get no buyers, you will get no attention. I promise you it doesn't work. So strategy number one, overprice your house. Do not recommend that. Strategy number two is list your house close to market value. So whatever market value is, let's say you have some improvements, maybe slightly above market value or maybe you don't have the improvements, maybe slightly below market value. That's where most of the listings that I sell, I recommend list your house close to market value. The third strategy is the strategy where you list your house well below market value. This is the strategy I'm going to recommend. If you don't want to put a lot of work into your house, if you're, quote unquote, lazy, if you just want to sell the house as is, you put your house below market value and you're going to get a ton of buyers to come look at your property. And the reason for that is they want a deal and you want to hire a really good agent who's able to negotiate and work all the buyers against each other. So it increases the price close to market value or what the maximum price that that someone's willing to pay for your house, which would be significantly higher than probably somebody like this who's going to make it very easy and stress free for you. You're just going to be leaving a lot of money on the table if you don't do it that way. So I'm going to put this slide on the screen for you. This slide is directly out of my own personal listing presentation. So all you realtors out there, I suggest you get a similar slide and explain this to your sellers. So right in the middle of the pyramid is market value on the left. It says this is the percent of the price above or below market value. So if you are 15 percent over market value, you're only going to get 10 percent of the buyers that are looking in that price point. If you're at market value, you're going to get 60 percent of the buyers out there looking at your home. And if you are 15 percent below market value, you're going to get 90 percent of the buyers to come and view your home. So a lot of you have been calling me saying, Audra, I'm getting no nobody looking at my property. I'm getting no showings. There's a couple of things you have to look at. Number one, the last three months have been a really, really weird market. We've had increased mortgage rates. We have an election. So it's a weird time right now. However, I still think the rule applies. If you're not getting any showings and you're getting no offers, you have to know you're overpriced. And if we see an increase in mortgage rates, that's going to affect affordability. So most buyers can't jump in and purchase higher priced homes at these higher mortgage rates. So eventually the price is going to have to stabilize or go slightly down. And if you're selling a home that isn't in perfect condition, you're going to have to take even a further hit if you're not getting those offers that come in. Now, some of you are like, hey, Audra, I just don't want to put my house on the market. I just want to have these investors come in and give me some quotes. You can do that. Just know what you're getting yourself involved in. Also, contact a really good agent. I'm not kidding. I must get emails and text messages five to ten a day from flippers, people who are looking for good opportunities. And like I mentioned earlier on in this video that I was able to bring three of my top investors that I think are fair and reasonable. They're not being too greedy, but they're being reasonable. So if you are working with a really good agent, they can also bring their investors in and also provide some bids or some offers for you at a discounted rate. Now, when you're negotiating these lower priced deals, it's sold as is. You're not making any repairs. You're making no credit. You also want an all cash transaction. OK, all cash transaction. Now, I did a video on this cash really cash. It's really an important video that I want you to watch. I'll link it down below in the description box. But just because somebody is willing to give you an offer doesn't mean necessarily that it's a good offer when they say it's all cash. Cash doesn't always mean all cash. Make sure you know where those funds are coming from. Once again, watch the video link down below. I really want you to be aware of this. OK, there are sharks out there, especially when we're talking discounted properties. There's a lot of people that prey on people's weaknesses. Be aware. That's why I'm recommending that you talk to a really good agent so they can help be a little bit direct in the right way. But there are wholesalers out there and there are some sleazy wholesalers out there that will give you an offer on your property. Let's say it's a million bucks. And then they tell you, hey, I'll give you a million bucks for your property after 20, 30 days. And during that duration of time, they're going to go find somebody else to sell the property to that. Let's say it's at one point two million. And then they do a simultaneous close and the guy makes two hundred thousand dollars without doing a single thing. Be aware of that. Ask a lot of questions. Ask where their money's coming from. Ask them to show proof of funds. Just make sure you know who you're working with. Let's talk about the biggest scam out there. And I get a lot of hate on this one, but it's the subject to an existing mortgage. What will happen is an opportunist, they call themselves investors, will see somebody that's in a distressed situation and they'll say, hey, listen, we looked at your property and we assess the value as five hundred thousand. Looks like you owe all this money on it. I'll tell you what, we'll give you fifty, sixty thousand dollars. We'll take over the payment of your mortgage. Your name is still on the mortgage, but we're going to take possession and we'll write this little illegal contract saying it's ours. OK, then you go take your fifty, sixty thousand dollars and we're done. And for people who are really struggling, that might sound like a really good idea for them. I'm going to suggest you don't do that for a couple of reasons. Number one, it's illegal. OK, you can't defraud your mortgage company. You just can't. OK, don't do it. Second thing is, let's say you want to go buy another property. Well, guess what? You can't because your name's on a mortgage. You probably can't qualify for two mortgages if you weren't able to maintain that first mortgage because your name is still on the mortgage. And the other issue that you potentially could be exposed to is what happens if the person who's paying for the mortgage stops paying? Now they ruin your credit. I highly suggest you don't do that. Now, some of you have reached out to me and said, Audra, we put our house in the market and we didn't get the activity that we wanted and I can't pay my bills. And this is the only solution. I don't know. I'd call an investor before I start working with you subject to an existing mortgage. Be very, very, very careful with it. This makes me very nervous for you and can potentially put you in a worse position than you already are. And now when I did that video, the subject to an existing mortgage, I'll link it once again down below. I had a lot of these investors that they call themselves saying that, oh, Audra, I don't know why you're being, you know, giving us a bad name. We do creative financing. We've done it for years. We've never been caught. Okay. It's just a matter of time. When you hear the word, hey, we're going to do some creative financing, run for the hills. I did creative financing one time and let me tell you, it was a nightmare. Stay away from anybody that says creative financing. It's probably something very sleazy. I have great news. I made it to 60,000 subscribers. I'm so excited. You guys know my 2025 goal is to get to a hundred thousand subscribers. So please subscribe to my channel. I just want a plaque. I promise. I just want that little plaque that says I made it to a hundred thousand subscribers. By the way, it's free, the subscriber thing. And it just, you know, makes me feel good. So help a girl out. So I had some of you reach out saying, Audra, I just don't want to stage. I don't want to declutter. I don't want to pack things up. I don't want to paint. Can we just get virtual staging in? Like have your photographer come out, take the photos, have them edit all the furniture out of the house and then put, you know, really pretty furniture in there. Like we do have computer generated stuff we can do like that. It's called virtual staging. So all I'm going to tell you is I'm not a big fan of virtual staging for that purpose and that purpose only. I do use virtual staging in some of my homes. Maybe I'll stage a bedroom when, you know, in reality, it's actually an office because that was the main uses for a bedroom. Or let's say there's a big bonus room and there's a bunch of kid toys. Maybe I'll put a pool table as a virtual staging thing so that the buyers understand what that use of that room could be used for. But to virtually stage an entire home without putting the effort in decluttering and making the house clean and having good paint is just going to be a waste of your time because the buyers are going to get there and they're going to be let down and they're going to feel misrepresented. And, you know, oh, they pulled a number on me. And I've been there several times when I'm with buyers and we get to the house, we're like, what? This looks nothing like the pictures. So I'm not a big fan of that. If you're going to put your house on the market, price it right and try to get it as clean as you can. The laziest mistake any home seller can make, no matter what your situation is, is hiring the wrong agent. I know this is like a theme in every single one of my videos because that's how important it is. You need to interview your agent. I do have a checklist of 13 questions you should ask your listing agent. I actually have one for a buyer's agent as well. There's a link that you can download that in the description box. It's free. Do not be lazy. Spend the time to interview your agent. Do the research. Now, I've had over 10 calls this week alone from some of you, some of my YouTube followers saying, Audra, we didn't do what you told us to do. We hired our friend or family or we didn't vet the referral. And I even have people in my local area saying, hey, I'm firing my agent. The contract's expiring. We want you to take on our listing. Would you be willing? Now, all I can tell you is it's a really, really bad mistake when you hire the wrong agent and your house is on the market for a long period of time. What will end up happening is your buyer has insight as to how many times and how many days your house has been on the market and how many times you relisted it. So please, please do me a favor and spend the time to find the right agent to represent you well in the sale of your home. You want to find an agent that has that experience. It's going to spend the money on the photos, someone that you trust, someone that's full time. Just trust me on this. And of course, I do have that referral partner. Her name's Diana. She'd be more than happy to give you an agent to interview. There's no obligation. It's just really important that you do the research to make sure that you're well-represented because you deserve it. All right. Thank you so much for watching my videos. Help me get to 100,000 subscribers. I want my little plaque. I want my YouTube plaque. All right, you guys have a wonderful rest of your 2024 and let's make 2025 memorable. Take care.