When you’re in a financial bind or need to make a quick move, what do you do with your house?
If you decide to sell, essentially, you have two options. You can list your home with a realtor and wait. Or you can sell your home to an investor.
Sellers often prefer partnering with an investor. Less documentation, less red tape, and less time. It sounds like an excellent way to sell a house and move on, right?
By now, you’re wondering how much will an investor pay for my house? You’ve come to the right place. Today we’re talking about how investors buy houses and how you can estimate what an investor might pay for your home.
Whether you’re exploring your options or you’ve already planted the for sale sign in the front yard, take a minute to read this post.
If you’ve already listed your home with a realtor and it’s still sitting on the market after 30 days, you’re likely feeling discouraged. While all sellers hope for an offer within the first few weeks, in the real world, it doesn’t always work that way.
Maybe your listing price is too high, the home isn’t staged well, or your agent isn’t marketing your home to the right demographic. It’s also possible your home needs too many repairs.
If the repairs are the issue, selling to an investor may work to your advantage since investors often buy homes in as-is condition.
Next, we’ll talk about how to calculate what an investor might pay for your home. For the seller with a home already on the market, this will give you some food for thought. If you’re considering looking for an investor, it won’t give you an exact figure, but you should be able to come up with an estimate.
Unlike the average home buyer, investors purchase property for a living. They’re not necessarily planning to live in a home they buy. They don’t usually develop an emotional attachment to their investment properties.
This means an investor looks at a property through a different set of lenses than a traditional home buyer. Instead of focusing on the sparkly new appliances, they focus on whether your home is a good investment.
Investors won’t usually pay an amount above the market value of a property. Doing that can negatively impact their return on investment. Therefore, the first thing an investor will do before offering anything on your home is a property valuation.
Once you approach an investor they’ll get to work researching your home’s market value. They’ll look at your home’s condition and any repairs they’ll need to make.
You should also do the same research starting with a review of recently sold properties in your neighborhood.
For a better idea of what you’re home might be worth to an investor, you’ll need to get an estimate of its value. You can use a tool used by all realtors and likely most investors. Real estate comparable listings—called comps in the real estate agent’s world.
To find comps, you look for recently sold homes. Limit your search to homes as much as your own as possible. Then compare your home to the comps and come up with an estimate of what your home could sell for in the current market.
If you can find homes with identical floor plans, that’s great! If not, at least look for homes with roughly the same square footage and living area. Once you’ve found a few comparable homes, select the three most like your home.
Looking at the size, location, quality, and features, you can, with a little effort come up with a good estimate.
Keep in mind looking at comparables only gives you an estimate. You still won’t know exactly what an investor might pay for your home. If you want a more accurate evaluation of your property, consider a professional property appraisal.
While pulling comps doesn’t cost you a penny, you will pay for a property appraisal.
An appraiser looks at your home much the same way an investor looks at a home. They don’t look at your décor and won’t care much about the beautiful job you’ve done landscaping.
What an appraiser evaluates is your home’s age, square footage, lot size, and location. They’ll look at the number of bedrooms and bathrooms. Appraisers also evaluate your home’s condition.
By the way, appraisers also utilize comps, but they also use everything mentioned above to put together a more accurate estimation of your property value.
An appraisal is a good start, but the appraised value isn’t necessarily what you should expect an investor to pay. Investors use their own set of formulas to calculate whether or not a particular home makes a good investment.
If you’re interested in an even more advanced way to figure out what an investor might pay for your home, you could perform a real estate investment analysis. The results of the analysis help you figure out how much you could ask for your home and still position it favorably in the eyes of an investor.
The other option and one that makes the most sense for the average seller who needs to get an offer and close in the least amount of time is to call a real estate investor directly. Instead of wondering how much will an investor pay for my house, you’ll get a real answer, from a real person.
If you’re ready to sell your home, don’t leave things up to chance, or rely on estimates. Contact us today and let’s work together!
Lisa is a local real estate investor in Austin Texas.