I'm sure you've seen these advertisements about signs of banished from the highway, or real estate section of the newspaper. Perhaps you've wondered if they are realistic-or are just a scam?

Well the truth is that the best are genuine. Are placed by private investors who have immediate access to funds and can afford to close quickly on your property. They often will cover closing costs and certainly will arrange all documents. Looks too good to be true? Well, it's not, but there's a hitch-I bet you guessed it!

If someone is willing to buy your House, for all cash and close in 7 days, they aren't going to pay the value of the retail market. This is a fact-can't afford to. These people aren't philanthropists-they do it to make a profit (although the reputation that also like to think they are helping people in difficulty). So, somewhere under retail market value is what you can expect to see on their offer. How much below market value? Depends on the condition of the property, its location and a host of other factors, but it could be about 70% of the retail price.

Before you think this is just a simple plagiarism-think about it. If you sold the property through an agent, you should pay them at least 6%. Add on closing costs, which could pay for inspections and a small discount on the price of sale, and can easily get up to 10%. Then you can factor in your company costs. If it takes 6 months to sell the House (and that's not bad in today's market), monthly costs-loan payments, taxes, insurance, utilities, etc. -take into account as well. On a House valued at $ 250,000, the irregular monthly expenditure could easily be $ 2,500 per month. Over 6 months, which amounts to another 6%.

Add the costs of preparing the House for the retail-perhaps another $ 5,000 and the situation could be like this:

Price $ 250,000

Discount for sale 5000 (2%)

Commission agent (6%) 14,700,000

Closing costs (2%) 4,900,000

Net sales 225,400

Less:

Company costs 15,000

Preparation for sale 5000

Total cost $ 20,000

Cash available $ 185,400 (74%)

So, if the House sells in 6 months and you need only discount of 2%, could walk away with about 75% of the asking price. If the market continues to decline, or trimming the sale price, that soon it may be less than 70%. I think bids of money, 70%, immediately, attractive appearance.

Of course, you can try to sell the property yourself, saving the cost of an agent, but the market statistics show that over 80% of FSBOs (For Sale By Owner) end up using an agent, however, and those who sell the House in oneself, get a lower price that the agent would have done. That's partly because buyers know that the seller is a saving of boards of Agency and that discount from the price of the offer.

When a private investor talks about buying your House in 7 days, this is just one of the ways you can do it. But as you can see, although at first glance the offer doesn't seem to be very generous when considering the variables that we discussed, may begin to look like a good deal.








Chris Lewis, of White Knight Holdings, is a private investor with many years of experience helping people save their homes and credit. You can find more details and useful reports to sellyourhousenoagent.com,.