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The hidden cost of guaranteed offers and cash offers

Guaranteed Offer
Cash for your home. No Headache?

On a recent road trip from Orlando to South Carolina I must have counted no fewer than 50 billboards on the highways promising a cash offer on properties — NO INSPECTION — NO COMMISSION — NO HEADACHE — NO HASSLE — AND, YOU GET TO PICK YOUR OWN CLOSING DATE.

  • We buy homes in as-is condition
  • We buy “ugly” and “pretty” houses
  • We pay ALL cash & beat ALL other offers
  • We buy houses you don’t want
  • We buy homes in all situations and conditions
  • We buy damaged homes from fire, flood, mold, & more
  • Are you relocating and need to sell fast?
  • Don’t want to deal with real estate agents?
  • The most competitive all-cash offer in the industry
  • Get a Guaranteed Offer and work with trusted home investors so you can close with confidence!

WOW! ….So who are these people?

Well, guaranteed cash offers have been around for almost a century. In recent years their popularity increased due to internet, social media, and low cost of postcard mailings. The actual buyers include private investors who buy one to a few fixer uppers, renovate, and resell for profit.

Others are institutional buyers who will buy and have a team of contractors waiting to turn your “ugly” house into a beautiful mansion in 5-21 days.

What the guaranteed offer buyers don’t tell you is that the offers they make is never at fair open market value. Notice here the term “fair open market” vs. just fair market. Anybody can make a fair market offer on a house when they are the only one making the offer. And while all claim to make offers that will bring you the most money, none will actually deliver the guarantee — in particular, if the property is outdated, distress, or beaten below market condition.

Many have investor relations or partners ( the money man ) who will offer a line of credit to buy for fix up, immediate resale or for renting. In all my days ( almost 30 years ) in the real estate business I’ve not actually seen anyone or any program that is actually “GUARANTEED CASH” where the buyer comes to closing with CASH. So guaranteed cash is really a hook than a payment method for real estate.

To repeat a Guaranteed Cash Offer is actually not a CASH OFFER at all.

So “CASH BUYER” is truly a term of art in the real estate business that is as synonymous as saying you will pay cash using your bank credit or debit card. A promise of a guaranteed cash offer is designed to excite the homeowner and gets the salesperson in the door for a listing appointment or to make a discount offer.

Others will promote a cash offer, SUBJECT-to them paying off the existing financing on the current home. For those in a distress situation, divorce, or need to sell quickly, signing away a home for $1000 to stop further deterioration of credit scores or finance is compelling but not really and in fact — far from a cash offer.

The bottom line is a CASH OFFER or GUARANTEE OFFER gets homeowners calling. They call the salesperson instead of the salesperson calling them.

The other kind of cash buyers or guaranteed cash buyers are institutional buyers. These buyers can be a lender, bank, or a publicly-traded company with access to billion$ to make cash offers at significant discounts. Some of the programs they offer can be enticing and compelling to the impatient homeowner to buy their new home even while the existing house is listed by a real estate agent, or with the option to delay selling the existing home for up to one year. A number of these outfits will allow the homeowner to take equity out of the existing home for down payment on a new home, or to fix up the current home for resale.

A few of them, for the right price, will buy “CASH” below market and pay any profit they make back to you.

When it comes to a CASH buyer or GUARANTEED CASH buyer the actual buyer could be a private buyer, investor, or a marketing hook for you to call for a listing appointment.

But here’s what CASH BUYERS or GUARANTEED OFFERS won’t tell you…..

— The offer is often 10-20% below market

— A cash offer might mean giving you $1000 so you will sign away your house ( problems ) to them

— Every cash buyer will require you to fill out one request form ( imagine doing this 10 times? )

— Every cash buyer will require an inspection ( imagine 10 inspections? )

— After inspection, almost all will come back to you for more discount ( think 5-10% more ? )

— All will promise a fast closing ( but actual # days usually 20-45 days )

— Virtually every cash buyer or guaranteed offer will end up relisting your house with a local real estate agent.

So, while the promise to sell for cash might sound compelling, it is often best to compare all the offers in realtime.

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US Supreme Court Opens Door For Guaranteed Highest Offer

If ever in the history of the real estate industry where millions of real estate professionals have been in a complete disarray about the future of home selling it would be this week.

Two days ago the U.S. Supreme Court denied a special request by the National Association Of Realtor to end future litigations against the organization regarding commission cooperation between competing agents and what agents know as the CLEAR COOPERATION RULE which mandates that Realtors make all new listings available in the MLS within one business day of advertising to the public.

For the general public this might appear as “nothing new” but to those highly experienced in the real estate business is a message to the industry that “commission sharing” between competing agents whether on or off the MLS is a restraint on competition. The U.S. Department of Justice has expressed through its Civil Investigative Demands that the Realtor organization has not been released from future lawsuits from the regulatory agency. And — the U.S. Supreme Court has notarized.

While change is difficult and costly to legacy business models it is necessary to welcome change for the benefit of the consumers. At Homeselling AI we believe Guaranteed Highest Offer can bring the most benefits for millions of homeowners through the power of real-time transparency.

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10 buyers in 2 days vs. 10 buyers in 30 days

Over twenty years ago the founder of Homeselling AI, Mr. Kosol Sek, stumbled across the biggest secret in the real estate industry; that is — It was possible to generate over 420 buyers for a home in exactly 12 days.

However, with this amazing discovery came the challenges in handling 420 buyers simultaneously. How could any human being handle 420 buyers all at once? In fact– how could any human being handle 2-4 buyers at the same time without increasing the chances of late, lost, or uncommunicated offers?

Over the next several years Mr. Sek and his team of 300 professional home sellers across the United States went on to develop a systematic process which subsequently became a scientific selling process for guaranteed highest offer for properties.

This journey marked the beginning of what millions of homeowners everywhere will know as Homeselling AI.

Homeselling AI was not intended to replace real estate professionals but to help manage tasks and activities that have been proven to be humanly impossible to achieve.

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$700 Million Settlement: What It Means for You

In many ways today’s federal court ruling has been a “Thanksgiving” for all homeowners and buyers across the United States.

While millions of homeowners will sell only one or two properties in a lifetime, today’s court approval to remove offers of compensation from multiple listings services and requiring buyer agents to sign agreements with buyers before showing properties was clearly an offer in compromise for the industry. The settlement amount didn’t come cheap– but at a price tag of $418 million from the National Association of Realtor and more than 500 Realtor-MLSs, $250 million from HomeServices Of America, $30.6 million from 15 non-Realtor MLSs, and 13 large brokerages. An additional $300 million will come from RE/MAX, Keller Williams, and Anywhere which owns brands such as Century 21, ERA, Coldwell Banker, Better Homes and Gardens Real Estate, Sotheby’s International Realty, and Corcoran.

However, the current settlement didn’t come with a cold turkey or blessing of the United States Government. A day ago the Department of Justice ( DOJ ) filed a last-minute statement of dissatisfaction against the industry’s self-guided resolve to uphold the practice of allowing listing agents to offer compensation to buyers’ agent outside of the MLSs. Uncle Sam believes this mechanism will invite more problems than bring solutions.

The DOJ was quick to clarify that today’s court approval will not shield or protect the industry from future anti-trust lawsuits or regulations from the United States.

To date — over 490,000 people across the United States have submitted claims for a portion of the $700 million pie as the industry continues with caution that Government regulation or lawsuit against the industry remains a possibility.

Despite today’s approval by a federal court in Missouri, the industry’s largest real estate brands and National Association of Realtor remain exposed to other allegations with antitrust implication including the Realtor Clear Cooperation Policy, the no-commingling policy, its three-way agreements, and the policy requiring a Realtor membership to access MLS services.

While the commission chapter one has come to a close ( sort of ) this Thankgiving, a half dozen future chapters have yet to be written on the future direction of the industry.

At Homeselling AI we believe the ideal solution to the industry’s challenges is to enable consumers to turn on their smartphones for real-time autonomous home selling. Only by removing human errors, mistakes, and omissions can the industry bring satisfaction to all parties including the United States Government.

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Why is homeselling AI a free service?

The founder of Homeselling AI, Mr. Kosol Sek, invented the first online “secrets” sharing platform almost ten years ahead of Youtube and almost two decades before today’s social media behemoths, eg, Tiktok, Instagram, WhatsAPP, etc.. In fact most people are completely unaware that Youtube was originally a dating website backtracking to 2005 when Kosol Sek was running the largest sharing community on the internet.

Now you can compare all the offers in realtime and say “good bye” to late, lost, missing, and uncommunicated offers.

Turn Your Smartphone Into A Real Estate Agent! Get Guaranteed Highest Offer.

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What does home selling have to do with Gamestop, AMC, Silicon Valley Bank, and Social Media?

In One word. Everything.

Between March 2022 and May 2022 the U.S. Federal Reserve raised its interest rate for the 4th consecutive time causing a once-hot real estate market to reverse momentum.

Likewise – the world witnessed how the stock price of Gamestop skyrocketed from near zero into hundreds of dollars in a few short weeks.

Again with AMC.

And — again with Silicon Valley Bank – when rumors hyped bank depositors to withdraw their money deposits, causing the bank to shutdown overnight.

The above case studies highlight the reality of today’s real-time world. Once took weeks or months to reach mass audience, news today via social media can trigger ripple effects across systems, countries, and industries.

It is happening in the real estate industry and the typical real estate agent has no mechanism to respond to the speed of today’s buyers.

In just one or two weekends a property will have been exposed to virtually every buyer in the market.

Favorable news can generate 10-50 offers on properties almost instantly while fake, fear, and uncertain news can drop demand to almost zero in just a few days.

The bottom line is yesterday’s S-L-O-W and costly ways to sell properties have no place in today’s marketplace. At least not if the objective is to best serve consumers.

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Why is pay per offer better than listing commission?

This question can be answered in one sentence.

But first a little background:

Regular surveys across the United States by Realtor Associations show similarities in terms and conditions of accepted offers that Realtors and inexperienced homeowners often overlook — until too late!

The below market data comes from the MN Association Of Realtors https://www.mplsrealtor.com/market-data/ for the month of March, 2023:

Inspections waived 35%

Cash 23%, Conventional 66%, FHA 5%, VA 2%, Other 4%

Average purchase to list price is 101.2%, Median purchase to list price is 101.4%

Seller contribution towards buyer’s closing costs 21%

Home warranties included 10%

Contingent on the sale of the buyer’s home 11%

Escalation clauses included in 4%

Appraisal gaps included in 23% of financed purchases

One Sentence Response

Because it has been scientifically proven time and time again that a listing commission will handcuff the homeowner from offering terms, conditions, and assistance to buyers to increase the chance of winning offers.

Now for the elongated response:

Asking a homeowner to pay $10,000 to $20,000 in listing commissions and again to discount or offer $10,000 to $20,000 to help buyers is too SCARY.

Unfortunately, without removing the listing commission many sellers will be pressured to discount price to attract lower price bracket buyers who may or may not be interested.

It should be noted that discounting the price of properties will not have the same effect as helping buyers to purchase; so let’s compare:

Seller A has the exact same property as Seller B for sale.

Same price

Same size lot

Same square feet

Same physical attributes

Same tax

The two properties are located across the street from each other in a town home community. The only difference is Seller A chose to sell his home through a listing agent who charges a listing commission. Seller B chose to sell through a Homeselling Ai agent to skip the listing commission.

In this apple for apple comparison the empirical evidence will be in the fact that Seller B has the flexibility to leverage the same money that Seller A had locked himself into a listing commission by offering incentives, assistance, and inspection/repair credits to create or increase higher demand for the same property.

In fact, by creating and increasing demand for the same property Seller B increases his chance of receiving multiple offers to escalate for full or higher purchase price. In many markets offering $1000 to $10,000 to help buyers, albeit for repairs, interest rate buy down, closing cost, financing assistance, or other needed expenses can skyrocket an extra $5,000 to $50,000, or more in profit.

Be sure to ask your Homeselling AI agent for your free report WE’RE TAKING THE SCARY OUT OF REAL ESTATE to learn secret #2 how skipping the listing commission can protect properties from having to discount. Visit www.payperoffer.com for more detail on how Homeselling AI has safely and effectively replaced the SCARY discount.

Homeselling AI invented the NoDiscount process since 2003 to help consumers to remove the complexity of having to discount properties to find buyers. Now with accelerated technology Homeselling AI makes it even easier to skip the listing commission.

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NoDiscount.com is now Homeselling AI

Over the past 20 years and according to the US Copyright Office ( recorded as public record ) on Copyright.gov:

2003: We invented a scientific PROCESS to sell real estate using each letter of the word P-R-O-C-E-S-S as a scientific element to automate the slow, tedious, and random home selling tasks that cause agents to be slow and costly. Copyright# TXu001187679

2005: We wrote How to Buy or sell your home in 1 minute to put the P-R-O-C-E-S-S to work by increasing agent performance and lowering commission. Copyright# TX0006546631

2007: We copyright protected details on The Automatic Way To Get Offers using the PROCESS.. Copyright TXu001593595

2007: We received a US Registered Trademark for NoDiscount. Professional investors and brokers from the US to Canada and Australia licensed our NoDiscount P-R-O-C-E-S-S to beat market offers and guarantee properties from selling at discounts. Reg# 3209158

2008: We received a US Registered trademark for The Automatic Way To Buy And Sell Real Estate. Registration# 3428952

2009: We created the first AI platform by aggregating answers to billions of questions through text messaging in partnership with one of the largest mobile phone companies. Unfortunately the real estate market crashed.

2020: We received a US registered trademark for Turn Your Smartphone Into A Real Estate Agent! Registration# 6112691

2021: We wrote We’re taking the SCARY out of real estate. Copyright# TX0008989430

2022: The US Patent & Trademark Office reapproved my NoDiscount trademark for real estate ( reg#6915937 ) and educational services in sales and marketing ( Reg# 6221143 ) .

Ai became a hit in 2023 — about 14 years after we created the largest Ai text messaging platform in 2009.

2023: Our parent company, Forsalebyweb.com, is proud to announce the most innovative brand in homeselling AI — Homeselling.AI. We’re using AI to power the same U.S. Copyright protected P-R-O-C-E-S-S to change the real estate industry forever!

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Are guaranteed cash offers worth it?

You’ve seen it advertised on billboard, TV, radio, social media, and perhaps even received a postcard inviting you to receive a free offer for your property. What’s the catch-22?

Well there is no catch. Every offer is a guaranteed offer whether it is from a large company, cash buyer, investor, or retail buyer. That said a guaranteed offer is almost always a wholesale offer — A discounted offer.

Guaranteed offers are designed for the homeowner who wants to avoid the hassle of showing their homes to strangers. The cost for the convenience can range 10-30% in price discount.

If this sounds like you, then a guaranteed offer can be your best friend. Closing can be quick with a flexible move-out date.

However be mindful of the difference between a quick offer and a quick closing date. Many of these guarantee offers are provided instantly over the web but requires 2-5 days for inspection. It is during these 2-5 days that the guaranteed offers can require additional discounting for minor repairs and major work.

A better alternative to receiving wholesale offers via the guaranteed cash offer programs is to compare them.

Compare wholesale offers with retail offers in real-time. The difference could mean $5000 to $50,000, or more for you!

It is worth noting that many investors and real estate companies promote cash offers as a benefit to closing in 5-14 days. The reality is that many cash offers actually take 30-45 days to close.

Perhaps the greatest surprise for the inexperienced homeowner is that a competent real estate professional should be able to direct any buyer to lenders who; also — can guarantee closing in 3-7 days!

If a quick closing is your objective then there are better options than selling at a discount. What you really should be seeking is a lender who can close fast. Like 3-7 days fast.

In fact, unbeknownst to the inexperienced homeowners, most guaranteed cash offers ( almost all ) include assignment clauses or require double closings on the closing date in order to fund sales through private lenders.

A genuine guaranteed cash offer can close as quickly as 3-7 days. To know which offer is best for you compare wholesale to retail offers in realtime.

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Moving Companies On Your Mind?

Asking your best friends or relatives to help move can be an uncomfortable task. What if your besties say “NO?” Will that paint a different picture of the individuals you had expected a YES?

It’s unfortunate that the cost of moving isn’t often included in the purchase offers ( they can and sometimes do ) because moving expenses can add up to thousands. First-time homeowners typically have less personal items to move and more frequently than not doesn’t include items from the apartment. Many new homeowners are anxious to begin a new-found beginning as homeowner that includes new furnishing, appliances, and matching window protectors. However move-up buyers regularly find themselves seeking professional help.

If you are the type who doesn’t want to burden friends with your moving politic the following questions are worth exploring prior to signing or making a deposit to retain a professional moving company.

Moving companies typically will quote by the hour and number of movers to complete a job. Due to insurance and other liability reasons it isn’t customary to hire only one mover thinking that you’ll need only an extra set of hands. Most moving jobs will require two or more workers and many companies are quick to recommend 2-4 workers at $120-$300 per hour, with a two hour minimum. The value added is that more workers can get the job done faster and thus you will be billed for fewer hours. The downside is that you might not need as much help as initially thought.

Some common questions to ask prior to signing or paying a retainer deposit might include:

1: What is the deposit amount?

2: What is the cancellation or change policy?

3: What is the guarantee if the moving company or workers failed to show up?

4: When does billing start? Does billing start when the workers arrive at your apartment or home? Does it start when the truck departs their place of business? Are you billed for travel time to and from pickup?

5: Are you charged by the hour or # of items moved, packed, installed, uninstalled, assembled/disassembled, unpacked? If hour, will you be charged in 15 minute increments, whole hour, per minute?

6: What if you go over the estimated billing time? What is the surcharge?

7: Will you receive a refund if actual hours worked will be less than the hours quoted?

8: What other fees are included with the quote? Consumable fee? Recycling fee? Gas fees? Transportation fee?

9: Who is responsible and how much is billed for the moving truck?

10. Are all the miles included in the rental truck?

11. Is the moving company insured and licensed? What does it cover?

It is worth noting that existing homeowner policies and rental insurance might already include accidental damage to personal properties. In the event your smartphones, computer, electronic devices, and other personal items become damaged while moving a simple call to the insurance agent could save you thousands.

Armed with the above information you should be able to determine which moving company can provide the best value for your money.