Locals receive yellow letters with offers to buy their homes
Many Calgarians are receiving unsolicited letters in their mailboxes, with the sender offering to buy their home.
CTV Calgary's consumer specialist Lea Williams-Doherty investigated to see if this is a scam.
Edith has owned her southwest home for years with no intention of moving. So when she received a handwritten note with an offer to purchase her home, she thought it was suspicious.
"My wife and I would like to buy your house. Call us," said the letter, which included a phone number.
Edith was one of many letter recipients who contacted Williams-Doherty and told her they too received similar letters, written in red ink on yellow paper with nearly identical wording.
Williams-Doherty discovered these so-called "Yellow Letters" are a marketing method would-be real estate investors are using to try to find sweet deals on home sales.
In fact, the letter Edith received was actually computer-generated by a local company that mass produces them for the investors directing these mass mailing campaigns.
David Sandbrand, the owner of yellowletterscanada.com, said over the phone that his personalized letters get a better response rate than traditional ads.
He said the reason investors do it is to unearth good deals first and avoid paying real estate commissions.
Service Alberta Minister Heather Klimchuk said there's nothing improper about this practice. But if you're inclined to respond and sell, be careful.
The buyer may use that time cushion as a hedge that the home price will go up, so they can immediately resell the home at a profit.
It's not an illegal practice, but the concern is that the buyer might try to break the contract if the home price doesn't go up, leaving the seller in a bind and on the hook for court costs if they try to sue for damages.
While some people are using this method and actually writing letters by hand, some marketers are just buying consumer lists from direct marketing companies that sell access to their databases for that purpose.
The yellowletterscanada.com website even has a link to five companies that sell consumer lists to direct marketers.