The Perks of Guaranteed Cash Offers
Are Those Guaranteed Cash Offers A Scam?
Perhaps you’ve seen those signs on the side of the road that read “Cash For Distressed Homes” and wondered if it was a scam. Or maybe you’ve seen billboards from legitimate brokers/investors like Kris Lindahl or even his Super Bowl ad and wondered if this was a real thing.
Can you just sell your house for cash quickly? The answer is surprisingly yes. And while this method of selling a home might not be for everyone, it is definitely for a specific segment of the market. It’s also making brokers like Lindahl incredibly successful. Here’s what you need to know about selling your home for fast cash.
Guaranteed Cash Offers
No matter what market you’re in, selling your home isn’t like selling anything else. It’s a major process. You need to find a broker to list it, potentially stage it, and then leave your house during showings—all while you probably still live there and are searching for a new place to live. If the house is in particularly bad shape, it may even need renovations. Then, there’s the contract and negotiation part. So, what if you could just fast-forward to depositing a check and moving on with your life? That’s exactly what Minnesota-based mega broker Lindahl does.
“With the uncertainty in the economy around inflation, jobs, housing, student loans, and so much more, we are seeing that homeowners want to trade in their house to guarantee that it’s sold so they can secure housing in the next chapter of their life,” he tells me.
Lindahl offers cash to anyone willing to sell quickly. Sometimes he keeps the properties and other times he renovates them. His approach, however, is a bit different from most brokers. While it’s certainly unorthodox, it makes him more approachable and simplifies the process, which can often be complicated and frustrating.
“Trading in your house is an easy concept to understand because everyone knows how to trade in their car and the benefits. It’s the homeowner’s choice of the direction. Once homeowners understand they have to do nothing to their house to trade it in and they can move stress-free, that’s when the lightbulb goes off,” he explains. “Most homeowners don’t want to gamble and take the risk on the traditional open market, especially in an economy like this. Getting a house ready for the open market is costly, time-consuming, and full of risk if they don’t get it right.”
Moving On Fast And Easy
Selling a home for cash can be a better strategy for certain segments of the population such as those downsizing, moving into assisted living, or selling an aging relative’s home. Cash buyers may also be necessary for homes that are in an extreme level of distress.
But there are other reasons why some sellers want to get out of their homes as fast as possible such as a pending divorce. This also means their neighbors won’t see a “For Sale” outside their homes. “The average home is currently on the market for around 45 to 50 days. That number is going up. In the open market, homeowners have to wait for showings to happen and hope the market doesn’t change while they are listed, or that another house comes on the market for less and impacts their price. There are so many risks to the open market with rising days on the market.” According to Lindahl, he can close in as little as three days.
This has also changed how the broker does business. “The program really started booming four or five years ago as more and more people wanted convenience in every area of their life. Most people sell their house around a life-changing event, and usually, that means they want to sell fast and have confidence it will close. The open market has a bunch of speed bumps (inspections, buyers’ financing, macro condition changes) that the Guaranteed Cash Offer doesn’t have.”
So, could this be a smart alternative to the traditional listing process? Lindahl has certainly convinced people it is. In the past three years, he’s closed over 8000 properties, which is a huge volume for a broker in any market.
Lindahl tells me other companies have tried to copy his strategies, but they’ve not been as successful, at least in his segment of the market. “We are able to execute because of the high level of trust homeowners have for our brand and the billions of dollars in real estate transactions we have closed.”
Cash In California
Selling your house for quick cash has also even become popular in warmer and more expensive areas like Southern California, on the outskirts of Los Angles including Riverside and San Bernardino counties, according to Sean Kershaw of SJO Investments. “The thought behind this from a business standpoint is to acquire a property to renovate and list the property on the market so a family can purchase or rent this property creating a ROI or cash flow. Again these transactions are typically for potential sellers who have a need to sell but lack the resources or the house lacks the qualifications to sell on the market.”
However, most sellers in higher markets like Los Angeles proper, where the median sold home price is $1 million, according to Realtor.com, would rather go through the traditional listing process, even if the house is a bit of a fixer upper. “We’re not seeing a ton of investors buying single-family homes because I think LA is just too expensive of a market,” broker Lori Levine Harris of Brock & Lori tells me.
However, she says there is no shortage of cash buyers, especially for the prime properties she sells in trendy neighborhoods such as Los Feliz and Silver Lake. “What we are seeing is parents buying houses for their kids, all cash. A lot of them.”
By Amanda Lauren, Forbes