June 4th, 2012

Benefits of Selling Your Home to an Investor

Let’s face it, the last decade in residential real estate has been exasperating. Bubbles, bursts, and an unsettled mortgage market leaves many homeowners wondering what to do. Options include keeping their home, selling the home through real estate brokerage, selling the home directly to investors, or renovating it. Each of these options has benefits, costs, and potential downsides.

Let’s assume you want to move and that’s why you’re exploring blogs. That eliminates option one, keep the house. Real estate brokers lead homeowners through the retail sale of the property. Brokers want a clean move-in property to sell. Why? Because that’s what their clients want. Brokers do sell to investors, but the trend is for investors to buy directly from owners to save transaction fees on property not in prime condition.

If your property can be sold retail, use a broker. If the property needs repairs, renovation or full restoration, call an investor. Why? They’re the professionals who can offer the best net sale proceeds for damaged or worn property. Investors look at the full potential retail sales price. They determine the cost of repairs to raise the home to retail levels. If any title issues exist, they work those solutions into their costs. Lastly, investors have a discount which allows them contingency money and sales costs with some profit.

What this means to you is – you can sell for cash for a predetermined price quickly to an investor, or you can sell through a broker who will list the property for more money, but charge a commission for their work. Sales of property in need of repair run into several problems. Buyers want to list repair work or discount the sales price. Most buyers working through brokers are not savvy construction estimators.

So the cycle is: agree on a price, uncover home inspection concerns, renegotiate the price, sweat out the mortgage process and hope your buyer is finance-able, and if everything goes well, settle. Or, you can sell directly to an investor and in one step, know you’re going to close quickly.