Selling One's House to a Real Estate Investment Company

[BunsGettingFirm]

Hi, all, long time no type! I have been working like a dog for much of this year! Eight months fly by when you're clocking in 60 hours a week.

I would like to ask the board members if they have sold houses to real estate investment companies. I'm looking to relocate next summer. I have a firm moving date, so I'd like the house selling process to be as hassle free as possible. That's why I have become interested in selling to a real-estate investment company. See http://www.graniterei.com for an example. If not this company, has anyone sold to a nationally-known and reputable company?

Thanks,

Buns

 

[cube_rat]

Your screen name is a hoot!

 

[TromboneAl]

We bought our house from a company like that. I don't know if I'd call it an investment company, but the former owner had to move all of a sudden, so he sold the house to some business, that sold it to us. Things went smoothly.

 

[BunsGettingFirm]

Haha, cube_rate, I'm glad you enjoy my screen name. It came about as a friend was mocking himself about how in shape he is (he's not), and I followed up with, "Yeah, he's got buns that rhyme with steel but are really veal." It was a great burn!

TromboneAl, do you happen to remember the name of that company? If I may ask, in which state do you reside? I live in PA. It sounds like the process of purchasing from an investment company went well for you. Do you think that you got a fair price?

 

[JPatrick]

We bought a home in 1983 (remember those 17% loans) from a similar company. We got the home for way under market value. I think that tells you the former owner did not do well when he sold it to the investment company.

 

[BunsGettingFirm]

JP, thanks for that information. I wasn't old enough to buy/sell houses in 1981. Can you remind me whether it was a seller's or buyer's market then? I would think that with high inflation, assets would be in demand (because they appreciate with inflation vs. cash which loses value), so even in a seller's market, the investment company still screwed the seller. That's something to think about.

 

[JPatrick]

JP, thanks for that information. I wasn't old enough to buy/sell houses in 1981. Can you remind me whether it was a seller's or buyer's market then? I would think that with high inflation, assets would be in demand (because they appreciate with inflation vs. cash which loses value), so even in a seller's market, the investment company still screwed the seller. That's something to think about.

That market wasnt' especially friendly to anyone except  those buyers with a lot of cash.
Sellers had enjoyed some nice appreciation, but were unable to get it out due to the lack of reasonable financing.  So sellers couldn't get full value and buyers were paying through the ear for loans.  The ideal was to show up with cash and a desire to close quickly.  If you spread that story around a few agents the bargains quickly surfaced.
We ended up dipping into savings to pony up 40% down which allowed us to get a loan at the low, low rate of 13%. Come to think of it, that may be shades of things to come, perhaps without such extreme rates.

 

[omni550]

BunsOfVeal,

About 15 years ago, I changed employers which involved a move of about 1000 miles. As this was an exectuive position, my new employer offered me the option of having a national relocation company (to which they paid a handsome fee)  buy my old house if I was unable to sell it thru a realtor.

Real estate was moving very slowly in my old area, so after about 3 months of listing it with a local realtor, I opted to have the relocation company 'buy' the house.

Their purchase price was supposedly based on taking the middle value of 3 appraisers. However, as you might expect, the 3 appraisers they chose came up with appraisals far less than "market value".

I did some research on comparable home sales and wrote a letter to the relocation company (with a CC to my new employer) with an attachment which clearly showed at what prices comparable homes had recently been sold and how my house had either the same or better amenities.

As this was before the internet, it was a hassle to get the comps and do the research on homes sales in my old area, but the time and aggravation was well worth it.

My letter must have been convincing. My new employer not only cut me a check for the difference beteween what the relocation company had paid me and what the comparable sales showed my house was worth but they also fired the relocation company!

I think the relo companies expect that they can lowball the seller who they know is busy transitioning to a new area and a new employer. They make their money on both the houses and the fees that the emplyers pay them.

HTH,

omni


 

 

[BunsGettingFirm]

Oh, well, I knew it was too good to be true. The only problem I have with having people come through my house at all hours of the night is that I have two cats. The last house I sold sold in 1 day when the first buyers showed up, so my cats didn't have time to get freaked out.

I may end up renting a studio apartment to place the cats and myself during those few months of showing the house. I suppose the two thousand bucks of rent is worth more than being low-balled by the investment company.