Selling your house can be stressful – from getting it ready, to staging it, to the listing and accommodating showings. The selling process can be long, tiresome and costly, especially if your house needs several repairs and updates. In this case, you may be better off selling as-is. Whether you’ve sold a couple of homes before, or this is your first one, you might’ve heard selling to an investor may be a good idea. When faced with such a situation, what is the best approach?
Selling your property to an investor can be beneficial. Real estate investors are individuals who make a living out of purchasing, renovating, managing, renting and reselling real estate properties. They may see your property as an investment opportunity, if they can buy it at the right price, do the repairs themselves and re-sell it for a profit.
For us to have a better idea over the matter, let’s take a look at some of the pros and cons of selling your house to an investor.
Allows You To Sell Your House As Is
In a normal sales transaction, you have to prep your house before you list it, so it will be attractive to buyers. Not only can this be costly, completing renovations and improvements, it also delays the time to sell, taking your personal time. Selling to an investor avoids these issues. Why? Most of them, especially flippers, are not looking for you to complete repairs to make the house more appealing. They look beyond the current condition of your property and focus on the improvements they can make themselves. This can save you a lot of out of pocket repair and renovation costs needed to update your home to meet market standards.
Investors usually finance their purchases with cash, or an already established line of credit. Because they are buying with cash, there is no need to wait for approved financing, or an appraisal….or worry that the appraisal comes back with required repairs, or a value lower than the purchase price. Both of these advantages mean no underwriting is needed, so you save a few weeks.
If you’re looking to sell your house as soon as possible, selling it to an investor could be your best bet. Provided that the sales transaction goes smoothly, the deal may be closed within a week, or two. This offers you a lot of convenience when you need to move soon, or need the cash quickly.
In a typical real estate transaction, the seller pays 6% commissions, split between the seller’s and buyer’s agents. Investors do not expect to be paid a commission, so you will save yourself this money, by selling to an investor. (If you have an agent, you may still have to pay them).
Flexible Payment Options
Investors usually have readily available funds before engaging in a sale. Certified funds, cash, scheduled cash payments and assumption of your existing mortgage payments are just some of the options available for them to fund their purchase. Not only does this allow the deal to be closed faster, this gives you an assurance that you’ll be paid at closing.
Your House May Be Sold Below Market Value
While it’s true that investors are able to fund their purchase and close quickly, their offer will most likely be lower. This is the biggest “con” of selling to an investor. One common downfall for a lot of homeowners, especially those who are looking to sell fast, is that they accept any offer.
It would be in your best interest to know the current market value of your home. A comparative market analysis (CMA) would be beneficial, to give you an idea of the market values of homes with similar features, and condition.
Assess your home to see if you need to make minor, or major renovations to boost your property’s value. Investors are looking for a bargain, and will focus on the cost of the needed repairs and updates that your house needs. Knowing the as is, and after repairs market value, will help you decide if it’s better for you to sell a-is.
At the end of the day, always do what’s best for you. It’s your home that’s being sold. Investors are looking to find a good deal, but they may be just what you need to sell your house. If you think you’re being given an unreasonably low offer by an investor, you can counter the offer, or simply walk away from the deal.
Factor in the cost and time to update your house to make it market ready. Know the as-is, and repair values before you list your house for sale. At SellUsHomes, we have a team of licensed agents who can help you determine your house’s value, and assist you in selling your home. We purchase homes in As-Is condition, at a fair and justifiable price in Detroit and Southeast Michigan. We close all our deals through a title company. To learn more, call us at (734) 224-5947 or email us at firstname.lastname@example.org.