Ask Phyllis: a blog series of frequently asked real estate questions.
Investor offers in trust sales
Dear Phyllis,
I know you have a lot of experience with trust sales, and I wish you worked closer to Mission Viejo. I am the executor of my brother’s estate in Mission Viejo. His home is mostly in its original condition. I listed the home with a local Realtor who lives in the neighborhood. After listing, we got a lot of low offers, apparently from investors. We opened escrow with the highest offer. Apparently, the investor had never seen the home, and when it came time for their money to go to escrow, they wanted an additional $50,000 credit because the home needed too much work. They never did an actual inspection. We then opened escrow with another investor, and it was basically the same deal with the enormous credit and money not going to escrow. The third time we opened escrow, the investor buyer had fourteen days to remove all contingencies. They sent money to the escrow company but canceled after fourteen days. They never even asked for credit. The listing has expired, and numerous agents have been contacting me. I hope you can guide me on the best way to deal with investor offers the next time around.
Perplexed
Dear Perplexed,
Thank you for the compliment! I have extensive experience with investor offers in trust sales. Moreover, if the home is vacant and has a Supra lockbox, the listing agent is notified each time an agent shows the home. This system makes it very simple for the listing agent to verify that the buyer’s Realtor accessed the lockbox. By logging on to the website, it clearly reflects each time the lockbox was opened. Additionally, if the showings are only by appointment with the listing agent, your agent should keep track of who they are meeting. Furthermore, your agent should have checked to verify that the agent showed the home or confirmed that the Supra lockbox was opened before you countered the offer.
You can check the offer from the third buyer. They likely had a provision for an assignment. Sometimes, this is a means for an investor to open an escrow on your home and try to resell it during escrow for a higher price. If they can make a profit, they assign their interest to the new buyer and close escrow.
When you interview the next agent, ask them the same question you asked me. If they provide you with insight similar to mine, you will be in better hands the next time. I wish you success.
Best regards,
Phyllis
