You've seen them: the "We Buy Houses" signs on telephone poles, the postcards in your mailbox, the ads promising a cash offer in 24 hours. If you own a home anywhere in Camden, Burlington or Gloucester County, you've probably gotten more than a few.
When you're stressed, behind on bills, dealing with an inherited house or just tired of the idea of showings and repairs, a fast cash offer can sound like a lifeline. I understand that. But I'm Jerry Mac with Keller Williams Realty, and after 23 years of selling homes in South Jersey, I'm asking you one thing: please don't sign anything until you call me first.
How Cash Investors Decide What to Offer
Most investors use a formula called the "70% rule." They take what your home would sell for after it's fixed up, multiply by 70%, then subtract the cost of repairs.
Say your home would be worth $400,000 in good shape and needs $30,000 of work. An investor's math looks like this: $400,000 × 70% = $280,000, minus $30,000 in repairs = $250,000.
That $150,000 gap between what your home is worth and what they offer covers their profit, their costs and their risk. One national survey of 700 investors found they paid a median of 67.5% of a home's fixed-up value.
The Investor Is Looking Out for the Investor
There's nothing illegal about any of this. It's their business model. But understand what that means for you: the investor makes money by paying you as little as possible. They're not your advocate. Their job is to protect their profit, not your equity.
When you list with me, my job is the opposite. I'm working to get you the highest price and the best terms, and I only do well when you do.
Be Careful With Postcards and Check-Style Mailers
Warning: that postcard or official-looking check in your mailbox is not a real offer. Many of these mailers are designed to look like a check or a guaranteed price, and the number printed on them can be anywhere from $25,000 to $100,000 more than the investor is actually willing to pay for your home.
The goal of the mailer is simple: to get you to call, to get them in your door and to get you talking. Once they're standing in your kitchen, the "offer" starts coming down, one repair, one problem and one reason at a time, until it lands at their real number.
So be careful. Before you get excited about a number you got in the mail, ask yourself:
- Is this an actual written offer for my specific address, or just a marketing piece?
- Does it say "up to" or "as much as"? Those words mean the real number can be far lower.
- Have they ever seen the inside of my home? A real offer can't be made without it.
If you're not sure whether a mailer is legitimate, bring it to me. I'll look at it with you, and I'll tell you what your home is really worth.
Watch Out for Wholesalers
Not every "cash buyer" actually buys. Some are wholesalers. They get your home under contract at a low price, then sell that contract to another investor for a fee. You end up waiting while they shop your house around, and if they can't find a buyer, the deal can fall apart. Offers in the 55% to 65% range usually come from wholesalers rather than serious buyers.
"But I'll Save on Commission"
That's the pitch, so let's do the math. Take the same $400,000 home that needs work. Even if you sold it as-is on the open market for $360,000 and paid a commission and closing costs, you'd still likely walk away with tens of thousands more than the $250,000 cash offer.
Every home is different, which is why I'd rather show you your real numbers than a hypothetical.
When a Cash Sale Can Make Sense
I'll be straight with you: there are rare situations where a cash sale is the right call, like a home with serious damage that no regular buyer can finance, or a deadline so tight there's truly no time to list. If that's your situation, I'll tell you. I'd rather be honest with you than win a listing.
Protect Yourself Before You Sign Anything
If you're still considering a cash offer, take these steps first:
- Have a New Jersey real estate attorney review the contract before you sign.
- Ask for proof of funds, like a recent bank statement, so you know they can actually close.
- Ask directly whether they plan to buy the home or assign the contract to someone else.
- Don't let a deadline rush you. A good offer will still be good after you've talked to someone you trust.
Let's Sit Down for 15 Minutes
I've helped more than a handful of homeowners who felt desperate to sell quickly. Before you accept any cash offer, invite me over for 15 minutes. I'll be 100% honest and tell you whether I can put more money in your pocket. No pressure and no obligation.
I sell homes all over South Jersey, including Cherry Hill, Moorestown, Mount Laurel, Marlton, Cinnaminson, Voorhees, Maple Shade and the surrounding towns in Camden, Burlington and Gloucester counties.
Call or text me at 856-220-1874, or start with a free home value report at www.southjerseyrealty.com.