Home Selling in 76247>Question Details

Daniel15o, Home Seller in 76247

I keep getting calls from a ibuyhouses.com and they are wanting to offer me 80% of the appraisal value stating that is the best price you can get in

Asked by Daniel15o, 76247 Wed Mar 17, 2010

tI keep getting calls from a ibuyhouses.com and they are wanting to offer me 80% of the appraisal value stating that is the best price you can get in hat area. the home was appraised at 112k. Is that accurate info, or is this guy just trying to swindle?

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Anyone who wants to buy your house at a discount is planning on reselling it later for more money. I would sell it myself and keep as much money as possible.

As Don said below, it is a legitimate offer, but really hurts your wallet unless you just feel you must sell very quickly.
1 vote Thank Flag Link Wed Mar 17, 2010
It's not a swindle. However, that's not precisely what the offer was. (I also offer that service as an investor--see http://www.WeBuyFairfaxHouses.com )

Here's how it works: The investor starts from the after-repair value (the fixed up value, if fix-up is needed) of a property. That value is then reduced to about 65%-70%. So, just to use round numbers, if the fixed-up value is $100,000, it's dropped down to $65,000-$70,000. Then repair expenses are subtracted. Let's say the home needs almost no repairs--maybe just paint and carpet--about $5,000. Subtract that, and you come up with $60,000-$65,000. That's what the investor calls the "MAO" or "maximum allowable offer." That's the most the investor will pay for the home. He may offer less.

To take your specific example, the investor would not base his calculations off an appraised value, unless the appraisal were very recent and done for the right reason. (Example: appraisals for refinancings are no good; they're not done for the right reason.) Instead, the investor would have a Realtor run comps, and base the ARV on the comps. And if you meant "assessment" rather than appraisal, an investor would never, never base an offer on a tax assessment. Never.

I doubt the investor said that 80% of the appraisal "is the best price you can get in that area." It's easy enough for you to go to a Realtor and ask how much the property might sell for. In other words, what are the comps? An investor might say that 80% of some figure is the most he could offer. I'd be glad to tell someone that, as an investor, the most I could pay would be 70% of ARV. I'd also be glad to tell the seller that if he didn't want or have to sell immediately, I'd be glad to list his property and sell it for close to 100% of ARV.

It really comes down to how quickly you want to sell, and what condition the home is in. As an investor, I'll buy the home in as-is condition. (I'll do that because I'll subtract the necessary fix-ups from my base offer.) Some sellers just want to sell their homes. They don't want to put in a lot of time, effort, and money fixing it up.

To address a few points below: One comment asks: "Did they provide a Comparative Market Analysis?" If they're really claiming that the best price you could get (from anyone) would be 80% of an appraisal, then it might make sense. But, again, most investors wouldn't base an offer on an appraisal, regardless of who did it. And most investors are honest enough to admit that you can get more by listing with a Realtor. I really suspect the investor was saying that 80% of some figure was the most they could offer. And there'd be no need for a CMA in that case. When YOU bought your home, did YOU present the seller with a CMA to justify your offer? I doubt it. You made an offer that worked for you and figured, correctly, that if the seller liked the number, he'd accept. If he didn't like it, he'd reject it or counter.

Look: You can get more by listing with a Realtor. Let's say your home is worth $120,000. If you list with a Realtor, after commissions, other expenses, and stuff, you might net $110,000. Depending on how healthy the real estate market is where you are, a properly priced home might take 45-100 days or so to sell. If you sell to a "I Buy Houses" company, you're likely to net about $77,000, depending on your home's condition. But you'll be able to sell in a week or two in as-is condition, not 2-3 months.

It's not a swindle. It's just a different business model providing a different mix of services to the seller.

Hope that helps.
1 vote Thank Flag Link Wed Mar 17, 2010
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
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At 80% Of The Fair Market Price is What You Want.Not Necessarily The Appraisal,That's Just An Educated Guest Based On Comps.If…
Answered by PaulBrennan on Tue, Jul 2, 2013 http://www.CallAllAmerican.com
0 votes Thank Flag Link Tue Jul 2, 2013
At 80% Of The Fair Market Price is What You Want.Not Necessarily The Appraisal,That's Just An Educated Guest Based On Comps.If You Know Anything About Selling A House You Know It Cost 15-20 % Of The Sale With A Realtor.But Then There is A Chance The Funding Will Fall Through & You Have To Start Over Again,Not To Mention Traffic Threw Your Home! So 80% is Fair Even If You Can't Waite. We Will Give You A Fair Price Without The Hassle! Sell Your House FAST & For A Fair Price,
Http://www.CallAllAmerican.com
0 votes Thank Flag Link Tue Jul 2, 2013
Do you mean that they want to pay you 80% of the tax assessed value or do you actually have a recent appraisal? The tax assessed value is often a lot lower than the market value of the home. You need to have a Realtor do a market analysis on your house to determine its value then you decide what price you can live with.

Investors like this company are looking to flip the home so they have to buy it for $.60 on the dollar or so depending on how much work is needed to bring the home up to par.

Naima
0 votes Thank Flag Link Thu Mar 18, 2010
It is the price that the investor will pay where they can still meet their profit margin to flip the house or convert it to a rental property. They are more than willing to offer you below market value if you'll take it. I'd rather see you keep your equity and sell to a buyer who intends to occupy the house as their primary residence.
0 votes Thank Flag Link Thu Mar 18, 2010
If a $22,400 hit sounds financially appealing then great... go for it.
"WAS" is the operative word regarding any appraisal on any property in this market. Appraisers use sold data. What about actives and pendings on your market right now, would they also have an effect on your price?
Before you decide, why not consult a couple real estate agents to get a real time home value (CMA) at no cost to you. Then armed with this information you can make an intelligent decision. If your home really is worth 112K the cost of a listing agent usually would be $6720 (6%). That puts $15,680 in YOUR pocket instead of going to ibuyhousesfromgulliblesellers.com. Imagine what could you buy with this extra money.
0 votes Thank Flag Link Thu Mar 18, 2010
There are companies that buy Notice of Default lists, unpaid real property taxes lists, etc., and they prospect by calling homeowners in distress.

In truth a home will sell for full market value when placed on the market, priced within the range of value and marketed correctly. In most areas homes will sell closest to asking price if they sell within the first 30 days. In most markets only about 20-25% of homes are priced within the range of value, the remaining 75-80% will take more than 30 days to sell and will sell at significantly below asking price.

So, if you need to sell, you should be able to sell at market price within 30 days. That would seem plenty fast for most people.

As previously noted, an investor makes sure that they make money on the buy side. Most investors will be a maximum of 80% of the market value. That way if things do not go as planned and they simply put your home back on the market , they will make at least 10-14% for their time and trouble.

Good luck. If you need to sell, interview at least two Realtors and compare their analyses and proposals.
0 votes Thank Flag Link Thu Mar 18, 2010
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
Daniel - Are you in a situation where you need to sell? Do you need to cash out quick? Are there a lot of houses for sale on your street? Have you taken care of your home? Are there a lot of foreclosures in your area or subdivision? If you assess your home from a business perspective rather than personal... you might be at a point where this might work. There's a lot to contend with but heres a point: 112000 - if this was a list price : You expect a possible scenario - 112000 minus agent commission minus title fees and closing costs minus whatever concessions>>>> you could be better off - if it suits your needs. Otherwise, get an agent. Your home might not be worth that if you cant sell it. Just something to think about.
0 votes Thank Flag Link Wed Mar 17, 2010
Be very cautious. See if you can find how much per sqft homes are going for in the area, and better yet get an agent to help you negotiate the deal, or maybe even find a better one out there!
0 votes Thank Flag Link Wed Mar 17, 2010
Think about this: If his business plan is to buy houses, fix them up, and resale them, he will have to get them at 80% of appraisal or less.

Check with a local REALTOR as to the actual sales price that you should expect before doing business with a company like this. If you need a referral, I have some friends in the Denton area that could help you out.
0 votes Thank Flag Link Wed Mar 17, 2010
Swindle.

Sis they provide a Comparative Market Analysis to support their claim?
Do you have a realtor? <= You need one.
0 votes Thank Flag Link Wed Mar 17, 2010
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