Why you should sell your house to a real estate investor?
Why sell your house to a real estate investor?
This is a question that we get asked a lot when we have clients that call us. There are many things to think about before selling a home in general and we thought it would be a good idea to break down the pros and cons of selling a home to a real estate investment company.
- Payment options – Most investors have the ability to pay in all cash so this means you can close very quickly. This might be your whole reason for selling your property in the first place. In this situation it is best to get proof of cash funds or verifiable certified funds to back up the offer before closing. Some investors may even offer to take over the existing mortgage on a property to allow the debt burden to be lifted from the homeowner. The most important thing is speed here that a traditional buyer will not be able to meet. Most traditional loans take between 30-45 days to close depending on the area and credit worthiness of your buyer.
- Selling as-is – When you sell a property to an investor in most cases you will be selling the property as-is so there won’t be any need to put anymore money into the home before closing. This will allow you to keep more money in your pocket for the purchase of your new home or any moving expenses you might incur after the sale. In most homes there are several items that need to be brought up to code in order to sell to a traditional buyer that requires financing. A lot of times homes need foundation leveling, new roofs, HVAC replacement, and major plumbing and electrical updates to pass inspection. All of these items are factors when selling to a traditional buyer who is applying for a loan. It will be required that these items be updated or this may hinder you from selling your home.
- Commission & Closing Cost – When you sell to an investor in most cases there are no commission costs or closing costs to be paid because there are no realtors involved and the investor pays the closing costs. This is something we take care of in our office so that the seller has no hidden fees at the closing table. Depending on the price of your home these costs can be sizable and may eat up a lot of the equity that you may have in your home. Make sure and ask the buyer what fees you will be responsible for paying because in a standard closing the seller is responsible for title policy, closing costs and pro-rated taxes.
- Fast Closings – Most investors are able to close within weeks of signing a contract which can minimize the burden of selling. Here at Gulf State Homebuyers we can close in 7 days or less depending on title processing. This is the main reason you might choose to sell to an investor. There may be back taxes, financial issues or even bills that need to be paid, and all of these can be addressed if you decide to cash out on the equity that you have in your home.
- Non-Professionals or Scams – Just like any business there are people who pose to be something they are not. Make sure that you do your research on whomever you sell your home to and be sure that you get proof that a cash investor has the ability to pay cash by producing bank statements showing the cash available or proof of funds. This will scare off most fake buyers and save you some headache. I would also do some research on the company you are dealing with by checking them out with the Better Business Bureau. Any reputable company with have positive reviews or a positive rating here for the public to see. You can also check out our Better Business Bureau profile here as well.
- Below market offers – Just like in any successful business there are profits that have to be made. This figure will vary from company to company, or opinion to opinion. In most cases when you receive an offer from an investor it will be based on repairs that need to be made to the property in order to sell. In a nutshell the offer will be based on the homes current condition at the point of sale.
These are several things that you need to think about when selling to a real estate investor. Every situation is not ideal for selling to an investor but if you have a home that needs a lot of repairs or updating it is a very good one. Many people who have sold to investors have gone through a divorce, inherited a property from a family member, incurred some financial trouble like back taxes, liens or loss of job. All of these situations are why it would be best to sell to an investor because most investors have a lot of experience in these areas and can close within the time restraints these situations require. If you currently fit this criteria and would like to find out more about our process and our company please give us a call at 281-816-5454 or fill out our inquiry form on our website .