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Beware of unsolicited offers to buy your home 'cash, as is'

Investors offer to pay cash for your home even if it's not on the market

If you own a home in a popular community, buyers could be about to make you a cash offer- even if you have no plans to sell. The offers may sound good, but there can be a major downside. Demand for homes is so high- some buyers don't wait for houses to go on the market. If your home fits what they're looking for- you get what's know as a cold call offer by card or letter.

Jim LaCour has been getting offers from strangers who want to buy his view home in Seattle.

"Initially I thought that's probably a good idea," said LaCour. "You know, someone is interested in our home and wanted to pay cash for it. I didn't think about the fact that someone might not give you what it's worth."

Certified Financial Planner Nancy Dienes urges caution. She says unsolicited cash offers are typically far below market value.

"When they offer you these cash offers, they're generally at a discount," said Dienes, Principal at Blue Canoe Financial Planning. "Some of the information I've read indicates that a cash offer is going to be somewhere between 70 and 80 percent of what the fair market value would be."

Remember, a lot of these solicitations are from investors looking to turn a profit. Don't make their gain be at your expense. Before you say yes, do your "home" work. Compare online value estimates for your address. Have a real estate office do a value analysis. Or consider paying for an independent appraisal.

LaCour says it's good to know his home is desirable- but for now- he plans to sit tight.

"I mean the last thing you want to do is sell a home and find out, gosh, I could've gotten another 50 thousand dollars, you know, or more," LaCour said.

When he and his wife do decide to sell their home, they say they'll go the traditional route and list it with an experienced, reputable real estate agent.

Other factors to consider before you accept an unsolicited cash offer- Where will you live if you sell? How much will it cost? Will you still qualify for mortgage? Will you be able to afford the total cost of living somewhere else?

Dienes says from her professional standpoint, about the only benefit she sees to selling your home to a cold call investor is if you're in an urgent situation where you must sell quickly and don't have the time or energy to list, prepare and show your home the traditional way. Even then, it's important to know the fair market value of your home.

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