Sell Your House For Cash Today—It’s All The Rage!

In this week’s Real Estate Roundup, Steve and Terry Story, who’s now got 31 years of experience with Keller Williams Realty in Boca Raton, had a conversation about selling your house quickly for cash. They also talked about the effects of aging baby boomers on the housing market.

Sell Your House For Cash Today

You’ve seen the signs on billboards or posters that read, “We Buy Ugly Houses”, or just, “Cash for Your House”. Steve asked Terry to explain the nature of that part of the real estate business.

She calls the people in that business “wholesalers” because that basically describes how they make their money. They look to buy houses at “wholesale” prices and sell them at “retail” prices. Terry explained how it works. “They buy houses, sometimes fix them up and then flip them, or they just buy them and flip them the same day. Say you want to sell your house right now. You call one of these numbers you see in an ad, and they write a contract to buy your house. A lot of times they assign it to a real buyer they already have lined up. As a seller, what’s really important to understand is that you’re selling your home at a severe discount.”

How The “Cash Right Now” Business Works

A successful real estate wholesaler makes their money by buying houses at a large discount and then quickly reselling them for a hefty profit. They can get a low price because they’re offering cash, and they’re offering to do the deal right now. If you’re a strongly motivated seller, for whatever reason, the offer of cash-in-hand right now may make you willing to sell your house for a lot less than it’s actually worth.

Steve offered an example to clarify things for listeners. “Say I’m in this business, and I have a buyer already lined up, willing to pay, let’s say, $140,000 for this house that’s worth $150,000. I go to the house. Maybe it’s owned by an elderly person who’s owned the house free and clear for years. I tell them, ‘I can give you cash today, no hassles, no long real estate closing time. I’ll give you 30 days to move out or whatever and I’ll give you $90,000 for your house.’ And they may think, ‘That’s good cash. That’s more cash than I’ve ever seen before.’ If the homeowner takes the deal, then I’ve already got a $50,000 profit locked in, since I have a buyer waiting with $140,000.”

The huge discount from the home’s value may make this kind of transaction look bad, like the buyer is maybe taking advantage of an elderly person, but there’s nothing illegal about it. Terry stressed the point that what homeowners need to know is that even if they’re desperate to sell their house quickly, they should still take the time to consult a professional real estate agent and get an appraisal. That way, she said, “If you still decide to sell it, at least you’re informed.” Steve agreed, urging sellers to at least do some minimal research on what their home is worth. He said, “I mean, at least go on online and pull up Zillow or something.”

That specific bit of advice prompted Terry to note to listeners that sites like Zillow don’t really provide accurate home values. The numbers you see on a site like that should be ignored as valid appraisals and only taken as very rough numbers. Those numbers are neighborhood averages. Zillow hasn’t really seen your actual house. For instance, they don’t know if you’ve completely remodeled the kitchen or the bathrooms. You might have a house right on the beach, but Zillow is averaging prices in the neighborhood that includes homes that are four or five blocks off the beach.

The Effect Of Baby Boomers On The Housing Market

Steve next turned the subject to the impact of aging baby boomers on the housing market. He started things off by quoting some recent statistics, saying, “Basically, boomers own one-third of all US properties, single-family homes and the like. And 27% of them will sell their home sometime within the next 20 years.” Terry contributed some more information: that between 2007 and 2017, roughly 730,000 homes were offered for sale by seniors, those over 60. She added that this is a trend that’s projected to keep growing for the next couple of decades. According to Terry, “From 2017 to 2027, they anticipate that number rising to 920,000 homes. And then from 2027 to 2037, we’re looking at 1.17 million homes for sale by boomers – and that’s per year for that whole decade.” She then made the point that this could lead to a really nice buyer’s market, since adding that many homes to the “for sale” inventory should put downward pressure on prices.

Terry wrapped up their conversation by joking with Steve, saying, “So, call me now to sell your house while prices are still up. Don’t wait 20 years.”

To learn more about buying or selling your home, you can connect with Terry at Keller Williams Realty.