Before You Accept That Offer From An Investor.

Real estate investors and “typical” home buyers are as different as night and day. That’s why it’s critical that you understand the nature of an investor when you receive their “offer” to buy a property that you have listed.   Here’s 3 sneaky tricks that investors pull that you should watch out for:  

#1 – I have all cash.

No they don’t. You receive an offer and it says that it’s all cash and for more than what you know your client will accept so what do you do? Real estate agents are constantly under pressure to move houses and many times this means accepting offers that have the same chance of closing as a politicians mouth. In this case investors could be just bluffing you and hoping that you won’t actually check to see if they actually “have the money” hoping that they can get the property under contract and “quick flip” it to another “investor”. They may have sent you a proof of funds from some “funding” source or “group of investors” but this just means they don’t really have CASH. Don’t fall for this trick. Accept only an actual bank statement showing their account balance or better yet require that they move the money into escrow at the title company or closing agent in order to ensure the funds are really there for closing.    

#2 – I can close fast, “in 15 days”.

Experienced real estate agents have learned to get the title work completed on properties at the time the home is listed. This gives the seller the confidence of knowing their home is ready to close immediately. Therefore, there’s absolutely no reason why an investor who has all cash needs to wait 15 days to close. If they need this much time then guess what?  They don’t have cash, they have a loan and they’re also likely wasting your time.  

#3 – I have stipulations, lots of them.

Shrewd investors play to win. This means they will make more offers on properties than they buy and they will GET out of the deals that they don’t want by using contract stipulations. Some investors call them poison pills or back doors. These little clauses in the contract like “investor must approve”, effectively allow them to get out of your closing without recourse and will leave you singing the blues if you were counting on that commission so be careful.   Now it’s over to you. Have you ever received an offer from an investor that didn’t close, what was the issue?