You’ve probably picked up your mail, sifted through it, and come across a letter. You figure it’s too good to be true, so you put the letter into your recycling box, thinking it’s a scam. You may have even seen some lawn signs advertising the same offer. Still, the whole thing gives you an unsettled feeling.
While often there’s a catch to this type of solicitation, there is always a chance that these letters represent a genuine party interested in purchasing your home.
Who would drop off a letter or post signs inquiring about making such a massive purchase? Let’s investigate:
- Real Estate Investors
- Personal Letters
- Realtor Inquiries
Real Estate Investors
A popular investment model in the US is called BRRRR method (Buying, Renovating, Renting, Refinancing and Repeating). This method hasn’t been as successful in Canada partially due to the mortgage qualification restrictions, magnitude of tenant rights, and average timelines to evict a tenant who isn’t paying rent. This whole process is dependent on securing homes for less by sourcing off-market opportunities, avoiding realtor fees, and getting properties for below market value. These investors usually seek to complete sales without realtors but still use lawyers to ensure transactions satisfy all legal requirements.
A standard method of finding these properties is personally addressed letters. If you receive one of these letters, be aware that there is always a chance that these inquiries are not above board and/or they are likely not interested in paying market value for a home. While you may encounter a case with a reasonable offer, it’s not common.
Personal Letters
Occasionally, buyers undertake to represent themselves and source off-market homes. Their approach would be similar to the above with a personal letter (likely with some details about them or their interest in your home) and an invitation to discuss further. This type of letter is less common than a real estate investor reaching out but is more likely to result in an offer around fair market value.
Realtor Inquiries
Sometimes, there isn’t enough active inventory on the market to meet a buyer’s needs. In this case, a buyer’s realtor may seek to find off-market opportunities by door-knocking or sending letters to homes of a particular style or neighbourhood. These letters would likely indicate that a local realtor has a client interested in a property like yours.
While this does happen with a genuine prospective buyer, realtors also tend to send out these letters as a marketing tool to source listings. In general, it’s best to proceed with caution and ask a lot of questions. If you have a realtor you trust, you can always ask them to investigate the letter’s validity.
If you are considering selling your home in response to an off-market request (especially without real estate guidance), it’s best to be cautious. In general, homes are more likely to fetch the highest and best price with a strong marketing strategy and maximum public exposure. A competent realtor is always recommended to best represent your interests and ensure you’re minimizing any risk. As with any significant transaction, ensure that you are comfortable, the details are transparent, and you have the support of a legal expert.
