You’ve probably seen them around the neighbourhood.
Flyers, scribbled with faux-handwritten typeface, asking you to fork over your home in exchange for cash. They’re distributed in neighbourhoods across the city — and across the country — by investors offering a “fair price” for real estate.
I recently saw one lying on the sidewalk in the Annex, surrounded by homes that could easily sell for upwards of $ 3 million in today’s market.
“Hi! My name is Jason,” the flyer starts. “I am an investor in the area looking to pay cash for your house.”
Why not sell your home on the market, like everyone else? The flyers state their case. The house will be bought with cash, no mortgage needed. The deal can be closed as quickly as one week — not the usual, endless process. There’s no need to worry about open-houses or multiple visits from prospective buyers, only one visit from the soon-to-be owners is required.
There’s often an added incentive program, too: by recommending another seller, the flyers’ authors say you might be eligible for an extra few thousand bucks.
Don’t bite, says Gus Papaioannou, a real estate agent at Realosophy.
“I haven’t spoken to the people behind these flyers, but they’re probably not interested in buying your home at market value,” he said.
The strategy, he figures, is to acquire homes below market price and resell them to the highest bidder. The buyers look to entice sellers who may be facing desperate financial hardship, or who don’t want to hire a realtor because of the associated fees. They might appeal to people who don’t want the hassle of turning their property into an open house, especially when a viral illness and its gruesome variants are spreading. But they’re most likely to be a rip-off, he says.
David Oikle, president of the Ontario Real Estate Association, says the flyers have been around for ages but seem to have really caught on in recent months — likely due to the surge in real estate costs.
“The market is so competitive right now. This is a way for someone to get access to a property before it comes onto the market,” he said.
It’s a wonder that anyone might sell their home off-market. Anyone who knows anything about Toronto real estate understands you can make a killing by selling your home in today’s economy. If you own property in the downtown core — or even in a remote field, hours outside the city — you’re a leprechaun on a pot of gold.
The flyers are rarely successful for that very reason, says Papaioannou. But all it takes is one sale for the flyers’ authors to become overnight millionaires. All the photocopying fees will have been worth it.
“I actually get why people might find it attractive to sell to them,” said Oikle.
“With COVID-19 going around, you don’t want people coming into your home. And you might be getting what you think is a fair offer from these buyers, that maybe you’d get on the market anyways.”
Outside of Toronto, where real estate markets have only heated up in the past year, sellers might not be as cognizant of their home’s value, making them more susceptible to these offers.
Oikle recommends that sellers should always hire a realtor who can represent their interests, and who will inevitably dissuade them from selling their home off-market.
“Find someone you know and trust, who your neighbour knows and trusts. And don’t rush anything — get lots of advice before you make decisions on how to sell your house.”
The flyers are mass-produced and often delivered to entire neighbourhoods. If you find one on your street, you’re likely to find five more. They’re looking for clients in search of a quick sale, wanting to rid themselves of their home as fast as possible, says Oikle.
When I called the number listed on the flyer, introducing myself as a reporter with the Toronto Star and asking to speak with the buyer, the person on the other end offered a quick “No, thank you,” and hung up.
But some investment groups have made less of a secret of their tactics. Companies like Whitecap Properties and DCI Properties, both based in southwestern Ontario, advertise themselves as private home buyers whose customers can skip the process of cleaning, renovating and staging showings by selling their homes to them for an off-market price.
Papaioannou says that, no matter what, home sellers should seek their own advisers before deciding how to rid themselves of their property.
“If you’re thinking of selling off-market, just make sure to get a second opinion. And maybe a third opinion,” he said.
Maybe even a fourth opinion.
JOIN THE CONVERSATION