If you’re looking to sell your home, you can find a way to avoid the stress that comes with it. Forget the stress of a complicated home transaction process by selling to a real estate investor! This type of sale can allow you to bypass things like an inspection contingency and even avoid appraisal concerns or buyer financing issues.
There are many reasons why people decide to quickly sell their home to an investor. Even though most people chose to sell their home the traditional way, there are some who believe selling to an investor is the better option.
Reasons To Consider Selling To An Investor
Disrepair – This is a great opportunity to sell your home as-is if your home requires a lot of repair work and remodeling
No financing – Let’s say the home you’re selling fails to meet permitting or safety standards, it’s likely the lender will decide not to finance a loan for the property. This could make it difficult to sell to traditional buyers. If you’re in a hurry to sell because you’re behind on your mortgage, an investor may be a great option for you.
Inherited home – If you’ve inherited unoccupied property, it’s best not to leave it empty for too long. Especially if you’re living in a fast-moving market! Selling to an investor can relieve you of capital gain taxes.
Divorce – Going through a divorce typically consists of dividing assets between both parties. Deciding to sell quickly and dividing proceeds can be the easiest way to do things.
Foreclosure – If you’re in a hurry to sell because you’re behind on your mortgage, an investor may be a great option for you.
Relocating for work purposes – If you’re on a time crunch, because your job requires relocating, selling to an investor, can speed thing up versus selling to a traditional home buyer
Pros of selling to an investor
As-is purchase. An investor doesn’t plan on living in your home. They don’t care if your home hasn’t been updated. If anything, a lot of investors look for homes that need some work done on them so they can do a fix and flip.
Quicker closing. It’s common for investors to pay with all cash, making the process a lot quicker. Two weeks is the average time it takes for a seller to close with an investor paying in cash. Selling to a buyer that needs a mortgage will typically take a minimum of 60 days to close.
No prep work. When dealing with traditional home sales, preparation is necessary before listing. You have to tidy up for photos and presentations. Believe it or not, sellers tend to spend a pretty penny prepping their homes when trying to sell. Again, most investors don’t look too hard at what a home looks like, they look for the potential it has financially in the near or far future.
Purchase agreements can be flexible. Let’s say your home is underwater, selling to an investor could be a great idea. Some investors would be interested in taking over your mortgage. Some may want to do a sale-leaseback transaction if that’s something you’re both interested in.
Cons of selling to an Investor
You don’t always know who’s buying your property. It’s not a legal requirement for an investor to tell you who they are. This can make some sellers uncomfortable when selling to an investor.
Low offers. It’s not rare for an offer to be lower when selling to a professional investor versus selling to a traditional buyer. These low offers are especially given when selling in a slow real estate market. Though it may be lower, an investor will still give you a market value that’s fair.
Possible scams. A real estate agent needs to have a license in order to represent a buyer or seller. This isn’t the case with an investor. The lack of credentials and professionalism can allow for scamming to take place. Make sure to always do your due diligence when making a deal with an investor.