Hear me out; this could be a lucrative 4 minutes.

Before I go into a discussion of your home I want to talk briefly about money.

Time compounds money, it makes it grow. But before it can grow in any meaningful way, you have to save enough of it over a long enough period of time to make the growth really work for you. Over 90% of the people on the planet do not save even 3% of what they make. Saving money takes discipline and the truth is, most people have zero discipline. I can tell you when there is quality dark chocolate around I have zero discipline. But when it comes to money you have to have discipline if you are going to get to keep it and make it grow. You also need to be educated on ways to maximize your returns on large transactions like the sale of real estate. For most people their house is the biggest savings account they have.

So lets look at what is the largest investment for most people; their home. Lets say a person purchased a home 7 years ago for $150,000. With closing costs their mortgage was $147,000. 7 years ago the interest rate on a 30-year mortgage was around 5% so the payment with principal and interest would be $789 a month.

They decide to sell their house and get an even larger one. If they list and sell with a broker here’s how it would look.

The house is now worth $200K. They list with a broker and sell for $195,000.

Sale price $195,000

Broker commission $9,750

Repairs to satisfy inspector $1450

Closing costs $5850

Mortgage payoff $129.529

They walk with $48,421

If they sold without a broker their chance of selling goes way down and the drop in sale price typically would make the final return smaller than when selling with a broker. Brokers do sell houses, the MLS is by far the largest database of listed homes but listings expire every day with houses that didn’t sell for one reason or another.

Lowering your price is not the only option.

There are people who want to buy your house but can’t qualify for a mortgage today. In fact about 80% of the people in the market can’t qualify for a conventional mortgage. However with a little bit of seasoning they could qualify for a mortgage in a year or two. You can capitalize on this type of opportunity by selling to this type of buyer. I’m not talking about deadbeats I’m talking about self employed business people who make a good living but might not have enough time in business or a couple who has some unexpected medical bills, someone who’s paid their bills on time their whole life but went through a brutal divorce a few years ago. The list goes on and on. There are many fine people in the marketplace who can easily afford the payment on the house and can qualify for a mortgage in a short period of time if they have some time. What’s in it for me, you say? If you were in a position that you did not need the equity from your home right away this is how the numbers would look.

All of your expenses are covered including principal, interest, taxes, insurance and all property maintenance.

If I purchase your home in this fashion I can pay you your $200,000 asking price. I am going to sell the house to the very type of buyer I described above.

Here’s how the numbers would look.

Sale price $200,000

Mortgage payoff $129,529 (you lock in your profit today with me).

Closing costs $2000

You walk with $68,471

That’s $20,020 more in your pocket. Even if it took three or four years before you cashed out that’s 41% more cash in your pocket. If you owned the home free and clear you would also be receiving monthly principal payments, which could put an extra $50,000 cash in your pocket. That’s 145% more money then if you had sold conventionally. What savings account will compound that fast?

The only time this really won’t work is if you need all of your equity today. As the saying goes, good things come to those who wait. Why would you want to leave that kind of money on the table unless you had to? Where else are you going to get that kind of return in the same period of time with little to no risk?

You may be wondering how we get paid in this type of transaction. We make a premium for putting the correct buyer with the correct house, your house. We heavily vet the buyers because you and I will both get paid when the sale cashes out. Unlike a realtor, who takes a listing and hopes someone sees it and loves the house, we don’t have to hope that someone loves the house because our buyers would rather own a home than to keep paying rent. The realtor is selling to a limited group of buyers. We have the buyers prescreened to be sure they are committed to refinancing the property on or before the term we agreed upon in advance with you.

But, as you can imagine we are investors, so the numbers have to work for us too. If you are priced 30% above the fair market value of your home you will never sell your house. There is a reason it is called “ fair market value”. If your house is priced fairly we can purchase it and you can move on with your life.

You may have additional questions I would be happy to answer them. If you don’t need your equity today and have a little time to maximize your investment or if your house has been on the market a while and hasn’t sold, lets look at the numbers together and see if it makes sense for you. I do want to buy your home; I can help you get full market value for it today.

Beth and Dave Mulvaney have been investing in Florida real estate since 1992. We specialize in helping sellers maximize their return.