Selling a house to an investor is becoming more and more popular in the real estate market. These investors are often looking for homes that they can flip quickly and profit but they also purchase these homes from people that are in distress, those that need to sell faster without a real estate professional.
There are both pros and cons to selling your house to an investor. While you will get money quickly, you may or may not be in a situation that requires you to sell your home quickly for cash.. It is crucial always to take the time to research the best way for you to sell your home before making a decision either way.
This article will go over both sides of this topic so that you can make the best choice possible.
Flexible payment options
An investor is often willing to offer a deal that you will not get from a traditional real estate agent. This may be in the form of paying all cash or offering flexible payment options, such as allowing payments over time at a lower interest rate. This will enable you to get the money for your home much faster than waiting for the sale to go through with a bank.
When you sell your house to an investor, the transaction can go through much faster than if you were to sell your home traditionally. It can take two weeks or less on average for sellers to sell their homes, investors have cash available so there is no waiting for back approval, credit checks, inspection process. However, if they need a mortgage, then 60 days minimum will be required for closing - which means you'll save yourself time which can be very important if the home needs a fast sale due to facing foreclosure or going through a divorce.
Investors are able buy homes "As-is". Because of this, they can skip any pesky repairs that would usually come with needing to sell a house through an agent. Many times a seller may think their home is in perfect condition and a potential buyer will demand certain repairs or upgrades to be done before they buy the home at full asking price. Selling your house to an investor will save you money and time in the long run, You will not need to spend thousands of dollars to upgrade the kitchen or bathrooms in an older home, or replace the carpeting from just normal daily use.
No need to move before you sell
If you are selling your home to an investor, then this will mean that you won't have to move out of the house until you have another place to live. Depending on your situation many investors are happy to work with you giving you plenty of time and assistance to move out of your current home, some may even have properties available that might fit your situation..
No Complicated Paperwork
Paperwork is probably the most significant factor that stops your home from being sold. The lengthy contract that a home seller must read over to sell the traditional way can be very confusing, it can be12 plus pages long. An investor doesn't have a confusing contract to sign, just a simple purchase agreement, there is an agreed purchase price then a contract signed that is just a couple pages long. Then investor will handle all the paperwork and any kind of filing that needs to be done. There is no loan approvals orbanks slowing the process down.
You don't always know who's buying your property
Investors don't have to tell you who is buying your house. They can be a person, an organization, or another company. The purchase agreement will have a business, an LLC or a Corporation as the buyer, this is to protect the investor form being sued personally. This is the same for every other type of business though.
Selling below market value
You may take a loss on your property to sell to an investor. They aren't looking for homes they plan to live in – they are looking to make a profit on your house. This means that they may buy it for less than the market value. Investors are a business and as such they do need to make money from the transaction or it would not make financial sense to purchase the property. There is always a reason the seller needs to sell below market value, facing foreclosure, the home has too many repairs, no matter what your personal situation is the investor is there to salve your problem .
The cash buyer is potentially a scam
As an investor, they might buy your home and not pay you the money that was agreed upon. but there are ways to protect yourself.
To avoid being scammed, make sure you know the name of your investor and look up their company online. This will allow you to research their reputation before entering into any agreements with them.If they do not have a compnay and it is just someone wanting to buy your home that does not mean it is automatically a scammer.
Never hand anyone cash and if the contract is confusing at all have a lawyer look it over for you. Make sure the entire transaction goes through an escrow service, this will protect both the seller and the buyer.
So, if you choose this way of selling a house to an investor, then our advice would be that you have good information about what options are available to you to sell your home with the situation you are in. Take your time, if you fell preasured then you may not be working with the best investor, that also goes for a real estate professional, this is your home and both need to respect you, your family and the situation you are in.