Expert: Karyn Foley - 8/21/2004

Question
There is a local housebuying investment company (in Salem, Oregon)that claims to be the solution for selling one's house quickly without the cost of a real estate agent or scores of strangers tramping through your home.  They claim to offer fair market value, but are straightforward in stating that they do need to make a profit, so if you are looking to receive ABOVE market value, don't call them.  This sounds attractive to me, as I may be transferred, and will need to sell my house quickly so that I can buy a new one at my new location.  Are such companies commonplace, and if so, are they usually legitimate?  Are ther pitfalls?

Answer
Dear Richard:  These companies need to make a profit therefore they pay less than the market value so that when they resell it for what is market value they can realize their profit.  I see no gain or advantage for you.  At least a real estate agent attracts many more buyers through contacts with relocation companies and with actual buyers and other agent.  This increases the opportunities of reaching as many buyers as possible, giving you far more exposure that these investment companies.  Thus, you can expect to obtain what is the maximum value for your home.  Yes, there are commissions to pay, but your chances of getting a higher price is far greater with a real estate agent.  Closing costs would be the same for either option.  Also, using a real estate agent gives you the support of making certain that you meet all of the state,  county, city and local retrofit requirements and other mandatory disclosures.  This eliminates your buyer having an excuse to come back to sue later for information that was mandated but not given.  Agents also have a referral system on hand for any services and repairs that may become necessary during the listing and sale period.  Consider them a resource for your convenience  and for your time.  In these times, you get what you pay for.  Don't sell yourself short - or your house either!  Interview three agents/companies who have a tract record in your neighborhood.  I feel certain that they are aware of the values more than any other investment company would be.  Also, they want you to sell for as much money as possible; they make a percentage on the actual sales price, where an investment company does not.  They also want to be a hero in the area, and their reputation is tied into the representation they provide and their success.  If I can help you out with any other questions, please contact me.  Good luck to you and I wish you the best. KARYN FOLEY