Everything You Need To Know When Selling Your Home to a Home Investor
Is it better for you to offer your home to an investor or work with a local agent to put it in the open market? There are advantages and disadvantages to both options and the correct choice depends on your needs. The good news is that you have choices, so let’s dive into them.
Selling to a home investor: The Pros
Selling your property to a home investor offers a couple of key advantages to you, including:
86% of home buyers lean towards financing their home purchase despite it being the most common cause of settlement delays and voided contracts. It takes an average of 45 days to close a purchase bank loan. When you work with a real estate investor, you can close much sooner because they are more likely to pay in cash.You don’t have to deal with bank appraisal requirements or bank repair requirements for loan approval.
Zero Repairs or Hassles
Don’t have the money to prepare your property for showings and online listings? Home investors who are commonly experts in ‘flipping’ will buy properties “with no guarantees” and in “as-is” condition. This is great for sellers who need to sell fast!
Less Paperwork & Minimal Prep Work
Selling directly to a home investor before your home is on the market lets you skipstaging your home and planningfor an open house! That is a consolation.
Selling to a home investor: The Cons
Offers from investors can be lower than what you could get on the open market
Investors are often looking for properties a little under market value. This is the main driver for sellers to work with a real estate agent and attract a regular buyer to the sale. Always consider the closing costs & the 6% commission that comes with selling on the open market. It’s worth doing the math to figure out if its worth it.
You will not always know who bought your property
Home investors aren’t legally obliged to tell you who they close a deal with. So, it could be a property manager who will put it out for rent or a developer who wants to turn it into a commercial building.
So, is selling to an investor right for you?
Now that we’ve seen the pros and cons of working with home investors, your next thought might be: is this the right move for me? Consider the following questions:
1. How quickly do you need to sell?
If you are in a rush to settle an estate, divide marital assets after a divorce, or relocate and can’t afford to wait around 45 days to close your transaction, work with a home investor. Home investors are open to working within your timeline!
2. Is your property physically ready for the market?
Ask yourself this: would an investor be interested in your property?
Studies show that most of the properties that are sold to an investor are the ones that need “more love.” Afterall, they look past the appearance and upkeep issues of a property to find the investment value in it.
So, if your property is in great shape and if you’ve already made premium renovations, there’s no reason for you to sell at a discount.
3. Are you financially ready forstaging and repairs?
A bad ceiling, broken plumbing, and HVAC issues can run up to $10,00 each in repairs and restorations. If you don’t have the money for out-of-pocket repair costs, then strategize with a home investor.
4. How much time and energy do you have to get the house ready for the market?
To geta home ready for a traditional sale, the average seller needs to:
- Pack items from every room in the house (8 to 10 days)
- Landscaping (3 to 7 days)
- Patch, repaint, and repair small dings and damages (10 to 15 days)
- Deep clean the entire property (4 to 5 days)
- Sort items for keeping, and donating (4 to 5 days)
Getting aproperty ready for market can take from up to 2 months to complete, depending on its condition, and how much time you can commit to the staging process daily.
If you want to skip this altogether, when selling your home, then sell to an investor.
5. What to do next?
If you are already preparing to buy a new property and need the proceeds from the sale of your old house to take the next step, then a cash sale liquifies your assets a lot faster. A home investor can close on the date of your choosing. If you happen to be in the Philadelphia or surrounding counties, give We Buy Any Philly Home a try.
Now that you can weigh your options better, it’s time to consider your priorities when selling your home. For a lot of people, it all comes down to profit versus convenience. Working with a home investor means a quick and easy process but below market offer. But, if you’re not in a hurry and can invest some time and money for staging and repairs, selling your home on the traditional market will likely land you a higher price. Whatever you do, make sure it feels right.