Selling your house to an investor can save you time and stress, but what you may not realize is that it can save you money, too! In fact, Realtor.com says that selling your house the traditional way – on the MLS, with a Realtor – normally costs the seller about 8% of the sales price. This includes a sales commission, fees, and staging of your house. The costs to sell can go even higher if your house needs repairs before going on the market.
In the real estate business, selling off-market to an investor means that a property is not listed or marketed for sale to the general public. It is part of strategy that investors use to find the most qualified buyers willing to offer the right price and close quickly without marketing a home to the general public. And, in the process you can save thousands of dollars by selling your house to an investor.
Why Sell to an Investor
One of the most significant advantages of selling your house to an investor is that you can sell quickly. And in many situations when selling your home, time is money. This is particularly true if you need to sell your house quickly because you’re moving, going through a divorce, settling an estate, or are experiencing financial difficulties.
Selling to your house to an investor means a faster and smoother sale. As an added bonus, by not have to wait around for months for potential buyers to make a decision, you can avoid having to make extra mortgage payments, avert potential vandalism to a vacant property, and conserve money you can use when you need it.
These are but a few ways that selling your house to an investor can save you thousands of dollars. Let’s take a look at a few more.
No Realtor Commissions or Closing Costs
Typically, when you sell your house through a Realtor you pay a commission of 4-6%. On a $300,000 sale that amounts to between $12,000 and $18,000. On the other hand, when you sell your house to an investor off market there are no commissions to be paid.
On top of those savings, there will not be any closing costs or fees associated with selling to an investor.
Save Money on Repairs and Upgrades
Another reason owners sell to investors is because the property needs a significant amount of repairs. Houses normally need to be in good condition for a conventional sale, but making thousands of dollars in repairs to a house that’s going to be sold anyway can put needless financial strain on a seller.
To sell your house in a decent amount of time the traditional way, you will need to repair the home and stage it. Common repairs required to sell an older house might include replacing the roof, repaving the driveway, adding vinyl siding, or making structural upgrades. And, if your house is seriously or dangerously outdated, you may need to upgrade the electrical and plumbing to bring it up to code and make it saleable. Unfortunately, many people don’t have the time or money for this.
Another substantial advantage of selling your house to an investor is that you don’t have to spend money on repairs or upgrades, which can be expensive and time consuming. You can also avoid the cost of staging your house or doing showings, since most investors don’t base their decision to buy on your house’s curb appeal.
If Having Financial Difficulties You Can Avoid Foreclosure
You may have lost your job, be on a fixed income, or be facing financial challenges that make it hard to continue paying your mortgage. If so, you could be heading towards foreclosure. Homeowners without a job or facing some other financial crunch often need to sell quickly to avoid foreclosure or bankruptcy.
Frequently, when sold in foreclosure, the selling price is far less than the home’s value. As a result, even when the lender forecloses and sells your house, they can come after you for payment if the sales price doesn’t equal to your debt obligation. Additionally, when a foreclosure occurs, you not only lose your equity, but it will stay on your credit report for 7 or more years.
By selling your house to an investor in advance of the foreclosure process, you can salvage your house through the sale and settle what you owe, including taxes, missed deposits, and penalties attached by liens. In the process, you save thousands of dollars as well as get yourself out of an overwhelming situation.
Many real estate investors, like Black Girls Buy Houses, have built their business models around helping homeowners in these kinds of situations get out of the house, save their credit rating, and move on. The fact that an investor can buy and close quickly in cash means they can help homeowners beat deadlines to prevent the foreclosure from going through. In this situation, a reputable real estate investor can create win-wins where you feel good about selling your home to them.
Home Occupied by Renters
What if you want to sell a house that is occupied by renters? In that case, selling a house to an investor could be a good strategy for landlords to use. Of course tenants have rights, and even when proper notice is given, renters usually don’t want to constantly have their lives interrupted by real estate agents marching prospective buyers in and out of the house.
By selling a tenant occupied home off-market to an investor, a landlord can make sure the property stays leased, and continue collecting rental income until a qualified buyer is found and the contract is negotiated. Oftentimes, a tenant may not even know the home is for sale, because the transaction is confidential and private.
Investors Make Fair Market Value Cash Offers
One of the reasons real estate investors can get deals done quickly is that they make fair market value cash offers. Typically, a homebuyer would be waiting on a mortgage company, setting up the escrow, getting an appraisal, and getting inspections. When you sell your house to an investor, you get to bypass all of that and get cash for your home.
Fair market value is what someone is willing to pay for something on the open market. A home’s condition is a major factor in fair market value. Keep in mind that an as-is home won’t have the same price point as a completely renovated home, even if the homes are otherwise very similar in age, style, size, location, etc.
If you see homes in your neighborhood selling for half a million dollars, that doesn’t mean your home’s fair market value is comparable. Your fair market value will be based on its current as-is condition. So yes, investors do pay near fair market value when you consider its in as-is condition.
How Much Will an Investor Pay for My House?
When thinking about selling your house to an investor, you need to know how much they’ll pay and why. Remember that investors tend to recognize when a property offers a good value to them, and when it doesn’t. People invest in things because they believe they can make more when they sell them than they paid for them.
Predatory investors take advantage of sellers who don’t know what their home is really worth. Reputable investors don’t make money by ripping people off. They recognize how to create win-win situations for themselves and for the house seller.
Reputable investors choose homes that they can cost-effectively fix up and add value to the house and the neighborhood. And they make a profit at the same time. In general, investors buy homes in as-is condition. That means the purchase price may be a bit lower than you’d expect on the open market.
But remember, you’ll save money by not paying commissions or fees, having to stage your property, continuing to make mortgage payments until you find a suitable buyer, or make repairs and upgrades. Plus, you save time and got added convenience.
Typically, to learn the fair market value and receive an offer, you will need to invite the investor out to your house for a quick inspection and conversation about your house.
There are many reasons why you would want to sell your house to an investor. Maybe you need to move quickly, are going through a divorce, settling an estate, are experiencing financial difficulties, or have repairs and upkeep that you cannot afford.
One of the greatest benefits of selling your house to an investor is that you can also save thousands of dollars in the process, while moving quickly through the process, avoiding foreclosure, and potentially saving your credit.
And, if you or someone you know in the Washington DC metro area, Maryland or Virginia needs to sell their house their house quickly in as-is condition, Black Girls Buy Houses would love to help them. Feel free to contact us anytime with questions!