Selling to a Real Estate Investor: Positives and Negatives

Are you considering selling a house to a real estate investor?

Many of you have probably seen the signs around town: “We Buy Houses CASH” or “We Buy Houses FAST.” But if you’re like most home sellers, this may be your first experience dealing with investors. Knowledge empowers good decisions, so here are the pros and cons of selling to a real estate investor.

Pros of Selling House To Investor

#1: Flexible payment options.

Many benefits exist for people selling a house to a real estate investor. Certified funds, cash, scheduled cash payments, and assumption of your existing mortgage payments are available payment methods, among others. Most investors who buy houses fast, including Sovereign Home Buyers, are able to pay cash in full at closing, and may also offer other services at no out-of-pocket costs.

#2: Selling “as is”.

Investors buy homes “as is” in order to flip them. As a seller that plans on selling a house to a real estate investor, this allows you to avoid any costly repairs that would normally be considered your responsibility. If you know you cannot afford to repair or stage your house yourself, then you might consider selling your house to an investor.

#3: Fast closings.

Some investors can close in as little as seven days because the sale of the property does not rely on approved financing, appraised values or home inspections. Being able to skip all of these steps speeds up the process. We regularly close in less than a month, and some other investors offer the same fast service.

#4: No need to move before you sell.

Unlike with a real estate agent, you can negotiate so that you do not have to move out of your home before you sell it. The house does not need to be “show ready” for months on end while waiting for a buyer. When you do find a buyer, you also don’t have to be out of the house until you sign the dotted line. Even then, you can almost always negotiate a lease-back agreement with your buyer, meaning you can have the equity you need out of your home before you move out.

Cons of Selling a Home to a Real Estate Investor

#1: Selling below market value.

If you’re considering selling a house to a real estate investor, it usually sells as-is (below market value).

Real estate investors are aware of the advantages behind their cash offer as well as the risk they assume by purchasing “as is.” The discount is necessary to sell a house quickly and reflects the “price” of a quick sale. Investors also have to pay closing costs, repairs, holding costs, and back taxes, and offer enough for you to consider it fair. 

2: Scam artists.

To avoid scam artists posing as investors, get the name of the investor and research online to know more about them. Ask for references and look them up with the Better Business Bureau. While this is a start, you can actually do a lot yourself to make sure you are working with a credible and reliable company. Learn more details about how to avoid real estate investor and “guru” scams.

3: Investors do not need a license to buy.

It’s true. Because investors aren’t representing a buyer or a seller in the transaction and are only representing themselves, they do not need a license. Some investors are corporations while others are individuals buying and selling on their own. Do not decide on a company to sell your house without researching them. You can also ask about their experience and credentials, and a reputable buyer will deliver.

Contact us for a free, no-risk quote within 24 hours.

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