Like me, you are probably an investor in the stock market or similar type of investment that allows for your nest egg to grow with some end in mind, like starting a new business, helping to pay for your kid's education, or perhaps retirement. So, you will understand when I ask the question: What is the goal of an investor? To buy low and sell high, right? After all, you wouldn't be able to invest for very long if you bought high and sold low every time.
Now that we've established that investors are in the market to make money, let's discuss the investors who buys homes. If we apply the same principals and objectives, investors in real estate do the same, they buy low and sell high. So, when you see an advertisement that says something like...
"Get an all-cash offer"
"We buy ugly houses"
"Wonder what we'd pay for your house if we made an offer today"
"Pay cash for your home in as few as 7 days"
"No need to put your home on the market! We'll buy it without the hassle of showings!"
"Get an offer in minutes, not days"
...are you thinking that they are providing you a great service? Or, are you considering what you just read...that they are going to make money by buying your home at a low price so they can sell it at a higher price, to make money?
I'll admit, it's attractive not to have to adjust your life, to keep your home clean, to pick up every day on your way out the door in case you have showings, etc. I get it. When I list a home, I prepare my clients for the showing process. It will alter your life for the duration of time it takes to get your home under contract. But, what price are you willing to pay for the convenience to NOT list your home?
I want to point out a couple of details that are left out of the equation when selling your home for cash:
- If you have lived in your home for at least 3 years, in a fast-moving market such as what we have experienced in Greater Nashville since 2013, how do you know what your home is worth? Likely, it's worth more than you realize! Let's consider, for a moment, that in Williamson County in 2020, home-sale values rose, on average, $100,000 over their value in 2019! That's significant!
- SEE FOR YOURSELF: Williamson County Home-Sale Stats
- At the time I am writing this blog, there is so little inventory on the market, buyers are throwing money at homes just to have a place for their family to live! If you understand the law of supply and demand, that makes sense. So, if you allow your home to be put in the market, you stand a much better chance of getting a much higher price than if you sell your home off the market to a cash buyer, who, remember, wants to buy low and sell high so that they can make a quick profit. Otherwise, why would they bother.
A good, local agent, one with a (615) area code, will likely more-than-pay for themselves in the value they bring in local knowledge of the market alone! So, why would you want to work with an agent, or worse still, a website, who isn't local, or doesn't have a firm grip on local trends, pockets that are highly coveted, neighborhoods that are so sought after, schools that are clambered for or, well, you get the picture.
Incidentally, last summer, I wrote a blog on one of those areas in Brentwood. I call the area, The Magic Square.
In defense of companies that offer cash, there are a few aspects that may appeal to you! If so, then perhaps they are the best option for you, even if you have to sacrifice on price. But, how much would you sacrifice to have that convenience? If your answer is #30,000 to $120,000, then this blog is not for you. Hit the button on any one of these ads and get your offer today!
If you ask for a cash offer, how can you trust that value if you do not have a local, (615) agent working for you, assessing your home's real market value?
I am not making these numbers up! I'll give you a real-life example of what is taking place in the market over the last 3 months.
I am currently working with buyers who are wanting to buy in Franklin between $550,000 and $600,000. In the last 9 days, my clients have made offers on three homes, all priced $580,000 or $585,000. At $611,000 (because that is as far as their budget can take them) they are being outbid by, in the words of one REALTOR, "Ridiculously high offers!" By the second seller, "I had no idea people were that desperate for homes!" And by the third REALTOR, "While your client's offer was generous, we had two offers that were very, very generous!" In other words, at $30,000 over asking price, I was just told, by several listing agents, that my clients don't stand a chance.
Now, let's get back to your cash buyer. Who is this company and why, within the last three months have 20 of them sprung out of the ground? Again, I ask, while they offer you convenience, is it possible that they know what you don't...that they can turn around and put your home on the market days later for a quick 10-15% profit? I hate to break this news to you,..that's exactly what is happening.
The number one question I get asked when I go in for a listing presentation is this: "Is Zillow's Zestimate of my home accurate?" I'm glad you asked. Because I've also written a blog, "Zestimate vs Real Market Value." In this blog, you will get a picture of how I establish real market value, something that Zillow's algorithm is not able to do. I believe the blog is worth a read.
I recently did a bit of research on this very topic. I noticed that I was beginning to see real estate signs in front yards that said, "Zillow Owned." So, I went to Zillow's app and found out that you can actually search for Zillow-owned properties. I pulled two of them randomly from the Greater Nashville area. Here's what I found:- PROPERTY ONE (Franklin): The previous home-owner sold their home to Zillow in March, 2021 for $341,000. I happen to know that this neighborhood is the best value in Franklin! I saw the home and it had some pretty good updating already done to it. Eight days later, it was listed by Zillow for $367,000. Because I have that local knowledge that I was speaking about, I know what that home is worth. I created a CMA (comparative market analysis) to prove it. I could likely have put it on the market for $382,000 and perhaps secured for the sellers somewhere in the low $390,000s. That's a $50,000 increase from what the previous owners sold their home for. In other words, convenience was worth $50,000 to them. Or, did they just not know that their home was really worth 15% more than they sold it for?
- PROPERTY TWO: (Nashville) While this example is not quite as dramatic, the previous owner sold his home to Zillow in late January, 2021 for $277,000. 14 days later, the home went on the market for $298,000 by Zillow. While homes in Nashville are appreciating quickly, they are not appreciating $10,000 per week! Additionally, while this example has not yet closed, it is a well-appointed, up-to-date home that will likely sell over $300,000. I predict that the previous owner, in order to have the convenience, sold his home 10% under its real market value.
The bottom line is, at least interview a local agent and ask their opinion of the location, the intrinsic value of your home, what the upside and downside of putting your home in the market vs selling it quickly for cash to one of the many, many companies that are coming on line to vie for your business.
I would like to be that agent you speak with to give you a realistic perspective of how the market may respond to your home.
MY CREDENTIALS AS A REAL ESTATE PROFESSIONAL
- Experience--I am dedicated to my real estate profession through
continuing education and applying that knowledge to my multi-millions in
transactions. Here are some of the specialized certifications and
designations that I apply for my clients' benefit. 1) SRS: Seller Representative Specialist; 2) SRES: Seniors Real Estate Specialist, helping seniors make good, sound decisions that are right for them; 3) MRP: Military Relocation Professional, working with relocating military personnel; 4) RENE: Real Estate Negotiation Expert, intense negotiation skills. - Knowledge--I live, work, play and pray right here in Brentwood. I
believe that it is of paramount importance to work with a REALTOR® who
thoroughly knows the area where they work. I also believe that a great
agent should give back to their community by volunteering to make it
better. I have served, or continue to serve, in various volunteer
capacities in Brentwood. 1) Brentwood Planning Commission, 2) Brentwood Tree Board, 3) Vice Chairman of the steering committee for Brentwood's 50th celebration, 4) Represent Brentwood on Williamson County Board of Equalization.
Additionally, I have also run, though unsuccessful in my bid, for
Brentwood City Commissioner. I think it's safe to say, I know
Brentwood! - Communication Skill--I believe that texting and emails are for quick communication, not the only
communication method. I appreciate and enjoy a firm hand-shake. I
take pleasure in meeting people face-to-face and am more likely to pick
up the phone to call instead of texting or emailing. - Great marketing--Having come from a marketing/advertising world, I
fully understand target marketing, demographic and branding. Every home
that I market is evaluated on its own merit and then a marketing plan
established to give your listing maximum reach with intent of reaching
the most prospective buyers.
Meritant Real Estate serves all of Middle Tennessee but our forte is Williamson County. We work hard to earn our name, Meritant, which simply means, worthy.
John Magyar, Principal Broker, REALTOR®, RENE, SRS, MRP, SRES
Meritant Real Estate
5115 Maryland Way, Suite 195
Brentwood, TN 37027
(615) 333-8999 Office
(615) 482-8999 Personal Mobile
john@meritant.com
