I remember the first time I saw a television ad for one of those “Cash for Gold” companies.
I laughed. I actually laughed. For a moment, I thought it was a spoof. But as the ad went on, I realized somebody really, truly thought people were stupid enough to mail their gold to a post office box, in exchange for an unspecified sum of money.
That would never happen.
“Cash for Gold” is probably a billion-dollar business in 2019, and the only reason many of us never thought of the idea was because we didn’t believe people could be so stupid.
Case in point, if you described gold as “broken” and “unwanted,” nobody could really fall for that, could they? I mean, it’s still gold. It doesn’t matter if it’s “broken,” it’s still a goddam piece of gold, which is sold by weight. Nobody could watch a television advertisement and be convinced that gold, which is an exchange-traded commodity with an easy-to-find spot price, could be worth less because it’s “unwanted.”
But alas, people are that stupid.
And tens of thousands of people across the globe, every year, take their “broken” gold and put it in envelopes (one company brilliantly marketed their special envelope as a “G-Pack,” which was sent for free), and mail to a buyer who does not specify the value and/or purchase price in advance.
I just can’t believe it.
I actually wrote about this ten years ago in a blog post appropriately called, “The Friday Rant: The Dumbest Thing I Have Ever Seen”
Just having re-read that post for the first time in a decade, I’m actually a little surprised (and disappointed…) about how less sarcastic I have grown. Although I will note that my thoughts and feelings on “winners vs. losers” and the snowflake society we have become were perhaps a little before their time.
Just in case you have no idea what I’m talking about, and for some odd reason, haven’t already clicked on that blog link above for a fantastic read, let me dig into the YouTube archives and show you the original “Dollars4Gold” ad from 2008:
The quality isn’t great, but this is likely somebody videotaping their TV screen.
You get the idea though.
“Safe” and “convenient.” And “from the privacy of your own home,” nonetheless.
Fast-paced, exciting, a smiling pitch-man, and all the while, trying to convince you that your unwanted gold is “old” and thus not worth as much, even though, technically, all gold is likely between four and ten billion years old…
Tell me if you think I’m wrong on this, and I’ll tell you I disagree.
Now when it comes to real estate, people can’t be as naive, right?
Once again, I have to thank my readers for emailing me not only the idea for this blog post, but the actual content as well!
I have here not one, but two hand-written solicitation letters that blog readers have found in their mailboxes over the last couple of months.
And much like the “Cash for Gold” pitch, these letters offer terms and services that aren’t really all that favourable to the seller.
Here’s the first one, and you can click on the image to enlarge:
I have chosen not to black out the name and/or contact information because these letters were left in public. Also, those of you that don’t like real estate agents now have a viable alternative…
This letter is hand-written, and as the reader who sent me the image explained, “It even contained a small rip in the top right corner that was likely hand-made, to look like it was even more authentic.”
So what’s the pitch?
First of all, the letter uses CAPS to explain “AT FAIR CASH OFFERS.”
Then comes the dollar signs: $ We Buy Houses With Cash $
Who doesn’t buy houses with cash? I mean, the term “cash offer,” historically, meant that the buyer didn’t need the vendor to take back a mortgage. Over time, this has evolved to mean that the buyer is paying “cash,” and not taking a mortgage.
But in Toronto, why does this matter?
Why does it matter if a buyer has $1,000,000 in cash to buy a $1,000,000 house, or $200,000 and an $800,000 mortgage? How does this benefit the seller?
My question is rhetorical, but some of you will suggest that the “cash buyer” is safer, because the bank could pull the funding, or an appraisal might not come through. But these are extremely low-percentage scenarios; so low, in fact, that they really, truly don’t matter in today’s market.
These solicitation letters use the words “cash” for the same reasons that the “Cash for Gold” folks do; because the word itself makes us feel good.
Cash deal, no banks or additional fees involved.
Buy “As Is,” no need to clean or repair.
It’s true that there are no real estate fees involved, but the “no additional fees involved” seems to insinuate fees from the bank, when the buyer is actually responsible for the appraisal, if one is needed. And it’s not like the seller won’t need a real estate lawyer in this case.
I also don’t think “as is” refers to a clause in the agreement specifying that no representations or warranties are being made, but rather it’s just a synonym for “no need to clean or repair.”
The $1,000 fee proposed at the bottom is awesome for the non-selling home-owner who does know of a friend who wants to sell, but again, doesn’t it just make the overall offering sound a bit fishy?
Here’s the second
Like the first letter, notice the use of the dollar sign!
$$$ I BUY HOUSES $$$
Who does that remind me of?
Ah, yes, this guy:
“$$$ I BUY HOUSES!!! $$$”
“I Buy Your Jewelry!”
You have to admit, whether you like this person’s solicitation letter or not, there’s a lot in common between the content of the letters and those TV pitch men like Oliver Jewelry and the like.
“If you wait, it might be too late.”
I mean, come on! This is the oldest sales tactic in the book!
“ACT NOW! WON’T LAST!”
The only thing missing in the letter is something to the effect of, “And if you call now, in the next twenty minutes, we’ll give you a second Miracle Blade, absolutely FREE!”
Notice how both ads offer money for a referral to a neighbour or friend who is selling? $1,000 and $500 respectively in the two letters? I think that’s fair. It’s like referring three friends to the gym, and getting a month for free.
It’s also not unlike:
Yes, just to show him the gold. That’s all he wants!
Like when I asked my now-wife to come back to my condo to watch Anchorman after dinner on our first date. I was really just in the mood for a movie that I’d already seen twenty times…
I don’t know the authors of two solicitation letters, so I can’t comment on them personally.
I will say, however, that in Toronto, in 2019, anybody who sells privately from a solicitation letter like those shown above, rather than exposing their home to tens of thousands of buyers on the open market, is going to come up short about 99% of the time.
There are cases where, for example, an extremely private individual who shudders to think about the idea of strangers walking through his or her home, would benefit from selling privately.
But I still think that person is leaving money on the table.
We all learned the following from watching The Simpsons twenty years ago:
I’m not so sure that one could argue the authors of such solicitation letters are attempting to “give back to the community,” nor are they running some sort of not-for profit.
So by the same token, I have no idea why a home owner would engage these people.
Yes, I’m biased. I sell real estate for a living.
But I also don’t think that makes me incorrect.
I’d love to hear opinions to the contrary. I’d also love to hear how much you got for your grandmother’s wedding ring through Harold The Jewelry Buyer…