Selling house w/out any agents, HOW to verify out of state offer?

Question

I just listed my house for sale on Zillow / Trulia *only* yesterday and received an informal offer that we're both happy with.  Neither of us have an agent, but this buyer seems like he's done this before (buying out of state properties with cash, "fast closing", etc.).

I asked how he intends to submit his offer, and he says he's going to get with his closing company and email it to me.  I had 2 types of buyers in mind I was expecting -- local buyer w/out agent, which I would recommend we go to a local closing company of common ground.... or a local buyer with agent, in which case the agent would smooth some things out and we'd *still* be using a local closing company.

What I wasn't expecting was an out of state buyer using an out of state closing company....  Can someone share things I'll need to expect or things to watch out for??   I'm pretty sure he's legit, as I see online postings with his phone number, stating that he will give fair cash offers for houses with quick closing, etc.... but I definitely need to know what to expect.  Any tips or suggestions??

Wayne Brooks · Answer

@Jason V. First, I’ve never seen someone use a closing/title company that was not in the same state as the property.

This sounds like a wholesaler, a “virtual” one.  Yeah, they show up with a bunch of ads promising cash offers, quick closings, blah blah blah.

If you google him some more you’ll probably he is also offering houses For Sale in different areas…a wholesaler.  But if you decide to proceed…look out for assignable contracts, extended inspection periods (up until day of closing is a slick one).  Also, ask for a Legitimate Proof Of Funds…if he is really buying with cash he will have a bank account in His name showing that much cash…not a “commitment” from a lender, partner or bank account balance with someone else’ name….all wholesaler smoke and mirror tricks.  And get at least 10% earnest money.

Account Closed · Answer

It would be very interesting to have you post the address and a couple of photos (2 or 3 - not 60) and have the fine people of Bigger Pockets comp it for you and see what they come up with.

You may be surprised how much you are leaving on the table.

Wale Lawal · Answer

@Jason V.

You should consider having a local agent, as they have experience and can take care of all the things in the process.

Also ensures that everything is done professionally and correctly.

All the best!

Matt Devincenzo · Answer

I don't think I've ever placed anything less than 10% in escrow on lower priced purchases. On my residences in CA it was like 5% but that was $20K plus...why? I have closed on every house I've ever offered on because I know when I put in an offer I'm buying it, so I don't worry about EMD since I will be closing unless there ended up being a seller related performance issue. POF I have no issue sending you a screen shot of my bank account, again I'm closing so the funds are there.

Jason V. · Answer

I have such indifferent thoughts to using a listing agent that I fail to see the value they bring to the table.  It's my house.  I cleaned it up.  I took the pictures. I typed up my description, posted it to Zillow so far.  Now that the wholesaler thing has fallen thru, I'll be using a flat fee MLS service to list it... in addition to FB Marketplace & Craigslist.  Will probly even pay for a Pro membership here in order to list it in the classifieds here.  Wouldn't mind an offer from a wholesaler that puts up $10k in earnest money.

And I will probly add $8k to $10k to the price since the MLS listing means I am including 3% for the buyers agent and the obvious lowballers.  Simply getting it on the MLS will likely sell VERY quickly, as there's NOTHING that's really available, much less homes for under $200k.  I will up my listing price to a whopping $112,700 minimum...

And for those asking if it's properly valued, I would say it is... but comps might be slightly lower for lesser properties.  Only 1 way to know, tho.  But I do know that there's hardly any properties in either of my local MLSes that are actually available.  Think that's good for me, even if interest rates are rising.

I can do everything a listing agent can do, but better and with less slack & less miscommunication.   I can list to TWO different MLSes for $350 total, Craigslist, FB Marketplace, and BiggerPockets classifieds for, what, $30 to $40?   $400 total and the property will get a legit offer, versus paying $3,750 for a listing agent to likely list on just ONE of the local MLSes.  Welcome to the 21st century, guys!!  I will take liability of the contracts into my own hands for a $3,350 savings....

Mike Mocek · Answer

Why not just pay an agent a commission and not worry about it and remove liability?  Let the agent take care of it.  If you do not want to pay a commission, have an attorney review the offer.  Personally, when I am on the listing side, I ask for Proof of Funds and I call and verify the information on the letter or bank account.  If it seems fishy, the offer is presented to my client with my findings.  At that point, my client looks and decides how they want to proceed.

Matthew Bowling · Answer

@Jason V. What are your thoughts on using an agent?

Jason V. · Answer

@ Mike Hern,

Here's my Zillow listing.... Easier for me to just link there than filter out pics and attempt to upload them here.

https://www.zillow.com/homedet...

His contract is extremely simple and one sided.  I see why he doesn't need to see the property, as he's attempting to retain the sole ability to cancel the offer up until the the day of deed transfer (seller has no right to cancel! Hahaha!!!)... and of course, he's trying to retain "unqualified right to assignment of third party" without any earnest money.  Looks like this offer isn't going to happen.

Jason V. · Answer

Good stuff.  He says title company can be from anywhere, doesn't need to be from state the property is in.  He also sent me a DocuSign contract that I haven't opened but will be reviewing tonight.

And you are 100% right... He's a "virtual wholesaler", and even specifically used the word virtual a couple times in reference to me asking if he was going to come look at the property in person or have somebody else do it for him.  He said my photos were fine (I had almost 60, from as many angles as possible).  He told me that he was interested in flipping it but after seeing that the comps are relatively low in the neighborhood, he said he'd buy it anyway and just rent it out.

Will definitely be looking out for those things in the contract, but you've got my gears turning about the earnest money.... who would hold that if there's no broker/ agent?!  10% seems rather high... but hell, why not?!  Seems like I'll need to be extra careful of the assignable contacts and proof of funds tricks, tho.   That knowledge is definitely worth a 6-pack of the finest beer, my friend!!

I'll be back after I finish reviewing the "virtual" contract.  I'm surprised it's not an NFT.  These are some incredibly weird times we live in.

Selling house w/out any agents, HOW to verify out of state offer?

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