House for sale
January 24, 2010 5:04 AM Subscribe
I have a house I want to sell. I pick up the local paper and find an ad inside, the full text of which is under the fold. What exactly is the deal here? Does anyone have experience with this?
Under the rubric "Houses and Land Wanted":
ALAN will buy your house and pay FULL PRICE. No Fees. CAll 0417 *** ***
I am in South Australia, if that makes any difference. Can anyone shed any light on what is going on here?
Thanks in advance.
Under the rubric "Houses and Land Wanted":
ALAN will buy your house and pay FULL PRICE. No Fees. CAll 0417 *** ***
I am in South Australia, if that makes any difference. Can anyone shed any light on what is going on here?
Thanks in advance.
+1 delmoi. I wouldn't assume that "full price" means your asking price.
posted by chesty_a_arthur at 5:22 AM on January 24, 2010 [2 favorites]
posted by chesty_a_arthur at 5:22 AM on January 24, 2010 [2 favorites]
Good possibility it's a scam.
posted by megatherium at 5:51 AM on January 24, 2010
posted by megatherium at 5:51 AM on January 24, 2010
Response by poster: Is your house made of gold?
Only the plumbing and the ashtrays, but your point is pertinent.
posted by Wolof at 6:07 AM on January 24, 2010
Only the plumbing and the ashtrays, but your point is pertinent.
posted by Wolof at 6:07 AM on January 24, 2010
It's possible that it's some long term attempt at gentrification. Buy up all the properties in an economically depressed area, then develop it to attract wealthier tenants.
posted by cali59 at 6:11 AM on January 24, 2010
posted by cali59 at 6:11 AM on January 24, 2010
Response by poster: I'm going to step away from this thread until tomorrow morning now, but this is a solidly middle-class area with almost none of the circumstances of the recent-ish US bust applying. The global financial crisis forced real estate prices down here by 1%, after which they continued to rise as per normal.
I thank you all for your answers, keep 'em coming.
posted by Wolof at 6:19 AM on January 24, 2010
I thank you all for your answers, keep 'em coming.
posted by Wolof at 6:19 AM on January 24, 2010
I answered one of these ads, actually a letter mailed to my house, when selling a townhouse during the boom in Maryland. The price they were offering was below market, but we started the process anyway because we didn't want the hassle of a more traditional sale. Not fun to have to show a house when there's an infant and toddler to look after.
I think they were originally saying they'd give us about 165,000, which was pretty good for a house we'd bought two years earlier for 120,000. But they did some more number crunching and a quick appraisal and decided not to buy it. A few months later we got 190,000 for it in a traditional sale (minus fees and commissions). So, how much is your time worth?
posted by saffry at 6:32 AM on January 24, 2010 [1 favorite]
I think they were originally saying they'd give us about 165,000, which was pretty good for a house we'd bought two years earlier for 120,000. But they did some more number crunching and a quick appraisal and decided not to buy it. A few months later we got 190,000 for it in a traditional sale (minus fees and commissions). So, how much is your time worth?
posted by saffry at 6:32 AM on January 24, 2010 [1 favorite]
In the United States, an ad like this can indicate a real estate investor trying to buy seller-financed property without a significant (or any) downpayment. It's the typical approach taught by those late-night "you can make million in real estate without any money or experience" gurus.
posted by gabrielsamoza at 6:36 AM on January 24, 2010 [1 favorite]
posted by gabrielsamoza at 6:36 AM on January 24, 2010 [1 favorite]
Response by poster: In the interest of clarity I should point out that there is no bank debt that applies here. It is fully owned by the seller, which would be me.
posted by Wolof at 6:45 AM on January 24, 2010
posted by Wolof at 6:45 AM on January 24, 2010
Regardless of any special circumstances, the deal is going to be that they, not you, define "full price." Their idea of 'full price' will be below market. They wouldn't need to advertise if they were willing to pay market rate.
posted by jon1270 at 8:00 AM on January 24, 2010
posted by jon1270 at 8:00 AM on January 24, 2010
they probably don't want your house. in my experience, they will offer to take over your payments and give you a quit claim deed, with the loan remaining in your name. since you don't owe and therefore aren't looking to enter a distress sale, you're probably not the homeowner they're looking for.
posted by toodleydoodley at 8:21 AM on January 24, 2010
posted by toodleydoodley at 8:21 AM on January 24, 2010
Well right, the basic idea is to make money by buying houses from people who don't want to wait around for a higher offer. The guy owns the house for a while and waits for a really good offer.
The fact that house prices "continued to rise as per normal" is why this kind of thing works. The market crash here in the U.S. killed a lot of these types, most notably Casey Serin who decided to become a realestate tycoon at the tip of the bubble and ended up millions of dollars in debt, but in general they would have made a lot of money on the way up.
They could also be interested in renting them out.
posted by delmoi at 8:23 AM on January 24, 2010
The fact that house prices "continued to rise as per normal" is why this kind of thing works. The market crash here in the U.S. killed a lot of these types, most notably Casey Serin who decided to become a realestate tycoon at the tip of the bubble and ended up millions of dollars in debt, but in general they would have made a lot of money on the way up.
They could also be interested in renting them out.
posted by delmoi at 8:23 AM on January 24, 2010
My sister was contacted by someone when she was selling privately and they used very confusing language to basically try to get her to agree to give her the deed to the house in exchange
for very low monthly payments to my sister at 1% interest. They were preying on the uneducated and desperate.
posted by saucysault at 8:55 AM on January 24, 2010 [1 favorite]
for very low monthly payments to my sister at 1% interest. They were preying on the uneducated and desperate.
posted by saucysault at 8:55 AM on January 24, 2010 [1 favorite]
Not directly related to your question, but possibly something that would be useful to you is Steve Keen's (Australian economist) write ups on housing, housing prices and debt in Australia. His latest blog post is here, but he has been posting for years on related issues.
posted by thekiltedwonder at 10:05 AM on January 24, 2010
posted by thekiltedwonder at 10:05 AM on January 24, 2010
Bubble aside, Australia is not immune to the global recession and has been experiencing very low inflation or disinflation/deflation. In such an environment debt is a killer -- your cash gets worth more sitting under a mattress, but making payments on debt means you can't do that thus an opportunity cost, so holding debt is bad. This is probably a cash flipper. Unlike the bubble flippers (viz. Serin), he doesn't take out a mortgage -- he just holds onto the property until he can get a better price.
In any case, such an investor is extremely price-sensitive and probably 10x or 100x more knowledgeable than you are about the value of your home, so this is not something to go into expecting to get a better price.
posted by dhartung at 4:37 PM on January 24, 2010
In any case, such an investor is extremely price-sensitive and probably 10x or 100x more knowledgeable than you are about the value of your home, so this is not something to go into expecting to get a better price.
posted by dhartung at 4:37 PM on January 24, 2010
Sorry, hit post instead of preview.
Calculated Risk favorite Jim the Realtor has a recent video about cash flippers, one of whom has flipped 271 properties in the last year.
posted by dhartung at 4:38 PM on January 24, 2010 [1 favorite]
Calculated Risk favorite Jim the Realtor has a recent video about cash flippers, one of whom has flipped 271 properties in the last year.
posted by dhartung at 4:38 PM on January 24, 2010 [1 favorite]
This probably is a cash flipper, but the Australian economy and housing market are definitely not suffering from deflation, nor is cash worth more sitting under a mattress. Interest rates on savings accounts are currently 4 to 5%.
Housing price increases are quite substantial, which would tend to encourage a flipper.
See house sales on the boil and housing shortage and more on price increases
Whether the overall economy is doing well is irrelevant (and if you read your own article you'll see inflation is picking up)
posted by kgbrion at 6:06 PM on January 24, 2010
Housing price increases are quite substantial, which would tend to encourage a flipper.
See house sales on the boil and housing shortage and more on price increases
Whether the overall economy is doing well is irrelevant (and if you read your own article you'll see inflation is picking up)
posted by kgbrion at 6:06 PM on January 24, 2010
Response by poster: This was a bit self-absorbed of me, what with the whole no response thing. Short answer is I have been contacting reputable agents and have found a deal I am comfortable with. I never rang this guy, because as others have noted, "full price" is almost certainly under market, eg old loan valuation or council rates value, and in any event I have enough to do selling a house that I don't need any extra hassles. Been busy!
Thank you all for answering!
posted by Wolof at 2:25 AM on February 2, 2010
Thank you all for answering!
posted by Wolof at 2:25 AM on February 2, 2010
This thread is closed to new comments.
posted by delmoi at 5:06 AM on January 24, 2010