How The Process Works
Tell Us About Your Property
It’s efficient, easy, and free!
We’ll present you w/ a no-obligation offer
We’ll contact you to discuss our offer.
We Close at a local reputable title company
Payment in your hand in as little as 7 days!
How Do We Come Up With Your Offer?
Great Question! Below will go through a real life offer. There are many things that affect the value of a house. Condition of the property is a big factor. Also the Location of the property, is it on a busy road, railroad tracks, industrial power lines or commercial buildings? Or maybe a pond or lake? School District can have an impact as well. These all play a role in determining the value of a property. However, determining a properties value is somewhat subjective. If you ask 100 appraisers to value a single house, their values would be in a 10% range. So if the house was 200K, appraisals would come in between 190K-210k. With a 400K property, appraisals would come in between 380K and 420K. We use different tools to get an educated guess of a properties value. Comparable neighborhood sales are our best source of determining what “market” value is. We look for other properties that have sold in the area, make “subjective” comparisons and adjustments, and determine what the “estimated” value would be. We look for comparable sales that have sold in similar location and condition of what the property will look like AFTER we make necessary repairs/renovations.
Our offers are based on the ACTUAL numbers, it’s a simple math equation
What Do We Mean By This?
Simply put, our offers are based off of a fairly simple formula that goes like this: Your Offer = ARV (After Repaired Value) – Repair Costs – Holding/Purchase Costs – Selling Costs – Minimum Profit.
Fair Offer Breakdown
The ARV (or after repaired value)
The ARV is the likely value of what your home will be worth once any necessary repairs or updating is made. This is similar to the appraised value, however, we need to do some work to the home before it’s actually worth this number! Hence AFTER Repaired Value.
Repair Costs
This one is easy! When we call you after you fill out one of the forms, we ask some basic questions about the current condition of the home; how old the furnace/windows/roof are etc. When we do our property walkthrough, we’ll also get an idea of what may need updating or fixed. We add up what these repair cost through a spreadsheet with our current repair prices and boom, we calculate our total repair cost.
Holding/Purchase Costs
These costs vary greatly from property to property. This category includes what it costs to actually purchase, and “Hold” the home for the time period while we’re renovating it. Examples of holding costs would be taxes, insurance, utilities, lawn care, city fees, and any type of regular expense that a homeowner would normally pay monthly as part of property ownership.
Now those purchase costs…. you may be thinking, well, wait? If there are no agents involved, why does it cost you money to purchase the property? We wish this was the case! But, in the state of MN, on any property transfer, we pay title insurance, transfer tax, deed preparation, title examination, closing costs, and municipal fees and certifications. In a traditional home sale, you, as the seller, are responsible for some of these costs. But since we pay all your closing costs for you…you don’t have to worry about paying ANY of these, the burden is ours. These costs typically add up to around 3-6% of the ARV.
Selling Costs
Although we don’t use agents to BUY your home, we do need to pay an agent when we sell. We also have to pay closing costs on the sale, taxes, etc. These costs typically add up to around 9-10% of the ARV. These are all the fees you avoid if you sell to us 🙂
Our Minimum Profit
Yes, we do have to make some money to stay in business, support our employees/community, and feed our families. We focus on volume over huge profits because the more offers we get accepted, the more houses we can make, the more money we can make, and the more money in our pockets! We believe this is more of a win-win scenario for all parties involved. Our minimum profit to take on the risk is 20K, or 10% of the ARV if it’s a decent-sized rehab.
Simply Put:
The value of the home (after we fix it up) minus ALL the costs that go into fixing it up will bring us to YOUR OFFER. It really is as simple as that. No matter what situation you may be facing or the level of desperation you have to sell your home, do NOT adjust to our offer. We simply want to give you the highest offer possible, which still allows us to pay our costs and make a profit.
Calculating The ARV On Your Twin Cities House…
The ARV (or after repaired value) is an analysis of similar properties in your neighborhood that have recently been sold.
How are “similar properties” defined?
Let’s say your next-door neighbor for the most part has the same property as yours. What we mean by this is you both have one level rambler with 3 bedrooms and 2 full baths, finished basements, and a 2 car garage.
BUT your neighbor just spent money on a new kitchen, renovated a bathroom, installed all new flooring, and painted the whole house. Then, they turned around and SOLD their property for, let’s say….$250,000.
You may be thinking….so wait my home must be worth $250,000 or close to it as well, right????
Not quite, but it COULD be. In order for your home to also be worth $250,000, the same amount of work would need done to it to be worth the same value (that means new kitchen, bathroom, flooring, and paint).
So, My House in Its Current Condition Is Valued at What Then??? We refer to this as the AS-IS value.
Generally speaking, the AS-IS value and the After Repaired Value are NOT close in numbers. Although your neighbor’s house sold for $250,000, depending on the current condition of your home, your home’s AS-IS or market value without doing any repairs may only be worth, for example, $170,000.
This is an ACTUAL house we bought and the numbers we used to make our offer.
Think of this as your house in it’s current condition. Most likely livable, just could use some TLC or updating.
Our House Vs. Neighbors House
The Neighbor’s House sold for $250,000. It looks great! No wonder it is sold immediately!
So, in order for us to get the house we’re making an offer on, look like the neighbor’s house, and get it to sell for $250,000, we determined that we would need to spend $50,000 on repairs/updating.
Adding It Up…
We Know:
- The ARV: (Neighbors House) Sold for $250,000.
- The Repairs Needed: What we need to do to get your house in the same condition as the neighbors. $50,000
- Now Let’s Add in our Purchase/Holding costs, Our Selling Costs, and Our Minimum Profit.
- Purchase/Holding Costs: The cost to purchase the home (insurance, taxes, closing costs, municipal fees, cost of capital) is $10,278
- Selling Costs: The cost to sell it (agent commission, closing costs, taxes) is $17,367
- Minimum Profit: Our minimum profit for this house is $25,000
Last But Not Least…..Your Offer!!!!
We bought this house for $147,355, as-is, with no agents, no fees, no repairs, and no cleaning.
ARV ($250,000) – Repairs ($50,000) – Purchase/Holding Costs ($10,278) – Selling Costs ($17,370) – Minimum Profit ($25,000) = YOUR OFFER ($147,358)
As you can see, for us it’s all about the numbers! Even if you are in a situation where you desperately need the money, we do NOT low ball or take advantage of anyone’s situation. Many people we work with are not in a dire situation, and just don’t want to deal with putting their house on the market with an agent. Your offer is ALL based on the math….it’s as simple as that.
You May Be Wondering Though…..
Ok if my house were sold for $250,000 all fixed up, how much would sell for As-Is with an agent?
Let’s circle back to that other number we were talking about: The As-Is Value
Should I Sell My Twin Cities House or List It As Is?
We know you have options!!! One of those options may be contacting a real estate agent to find out how to list your house for sale as-is on the market. List it or sell it immediately?
The real estate agent (or sometimes an appraiser) will try to find comparable properties that have sold in AS-IS condition.
Let’s Go Over What This Means Again…
As-Is Condition or Value is the value given to a home that is sold in it’s current state and condition…meaning the seller is not making any repairs or doing any updating. The buyer would be buying the property exactly how it currently sits.
The real estate agent or appraiser decides our home in the above example is worth $167,000 in as-is condition.
Now For the Fun Part, Let’s Do Some Math Again!!!!
As-Is Sale on Market with Real Estate Agent
Net Profit To Seller = Purchase Price – Selling Costs – Holding Costs
Purchase Price: The As-Is Value, in this example $167,000.
Selling Costs: Same thing as our above example, only this time YOU would be paying the agent commissions, closing costs, taxes, etc. In this example, this would amount to – approximately 9-10% or $16,700.
Holding Costs: What it costs you to “hold” the property from the time it goes on the market, to the time it sells, to when it finally closes. On average 4-5 months and this would cost you in this example approximately $4,740.
Now We Have All The Pieces!
Purchase Price ($167,000) – Selling Costs ($16,700) – Holding Costs ($4,740) = Net Profit To Seller ($145,560)
Our Price Offer Vs. Retail Sale
Comparing Our Offer to an As-Is Sale on the Market With A Real Estate Agent
Our Fair Offer ($147,355) – Net Profit To Seller As-Is ($145,560) = Difference of $1,795
You Read Right….In This REAL-LIFE EXAMPLE, the seller put an extra $1,795 in their pocket by choosing us and our offer.
On Top of That….
We closed in 24 days, as-is, with no repairs, no inspections, no cleaning, and the seller got to leave behind their unwanted furniture.
Contact us today to get your offer!
Selling Your Minneapolis Home Can Be an Efficient and Easy Process
REC Property Group buys houses in and around Minneapolis (and other areas too!). We’re not listing your house… we’re actually the ones buying your home. Because we pay and are buying your Minneapolis home directly, we’re able to close immediately… or on your schedule.
As we’ve mentioned, when you work with us there are no fees and no commissions… like there are when you list your house with an agent. What this means to you is you don’t have to worry about extra costs, having to come out of pocket to sell your house instantly, or even getting your house ready for a sale (we’ll buy your house as-is).
Don’t worry about repairing or cleaning up your property. We’ll buy your house in as-is condition… no matter how ugly or pretty it is… no matter the location.
What Does “As-Is” Mean?
We buy your Minneapolis home in as-is condition… meaning you don’t have to worry about doing repairs, fixing your home up, or getting it ready for showings. We’ll handle all repairs, inspections, etc. after we purchase your home. We’ll factor this into our offer, of course, but it saves you the money and the headache associated with getting your home ready to sell.
What Does “All Price Offer” Mean?
All price means exactly that – all prices. Because we are real estate investors who are purchasing your home directly, we don’t rely on traditional financing like retail homebuyers. When you sell to us, there’s no risk of financing falling through or closing being delayed. When we make you an offer, that’s the full amount you’ll receive if you sell us your Minneapolis home.
How “Instant” is the “Instant Losing?”
After you send us information about your home, we can make you a no-obligation, fair offer in as little as 24 hours. After that, we can close at a local, reputable title company in as little as 7 days. Compare that to the 30+ days it can take to close when listing your house the traditional way, and the benefits are obvious!
What If I Don’t Need An “Instant Closing?”
At REC Property Group, we work on your time frame. If you don’t need an instant closing due to the need to make arrangements, explore your future options, etc. – we can schedule the closing on the day that works best for you!
Will I Get A Low-Ball Offer?
Our goal is to provide you with the fairest offer possible. Unlike other buyers or the big tech giants, we’re transparent with how we arrive at an offer amount. What we offer is based on what the value of the property may be once we make the necessary improvements and upgrades. We’re entirely transparent with this offer process and happy to walk you through how it works.
Is this Even Legit?
Yes – the real estate industry is rapidly changing, and thousands of Americans are exploring their options when it comes to selling their house immediately, the easiest, and in the most transparent way. That’s where we come in. We offer an alternative for those who may not have the time or ability to list their house on the market for top dollar. We’ll work with you to assess your situation, make you a transparent fair offer, and close on your timeline.