Selling your home to an investor is a different process than selling it to someone who is about to move in. Investors are looking for a property that will increase in value. This means that they may never actually see the property or live in it – in fact, they may just be buying your house to tear it down and build on the lot!
However, that’s not to say that you should accept the first offer you get from a real estate investor with no questions asked. Read on for a few questions that you should always ask once an investor expresses interest in your home.
It’s important to keep in mind that real estate investment takes many forms. Different types of property investments come with different requirements on your end.
If an investor is trying to buy your home to add it to a portfolio of properties that they manage, you will still likely need to pass inspections and do minor improvements. Someone will be taking residence of your property – just not the person that you are selling to. Selling to a buy and hold investor will likely be the same process as selling to potential residents.
Companies and individuals may flip homes as well, which means that they will renovate the existing structure and sell it for a profit. This means that you won’t have to do as much work before you close your sale. There’s no point in redoing the kitchen yourself to get a higher price if the next owners are just going to redo it anyway!
Similar to flipping, development investors will buy your house to tear it down. A new property will be built from the ground up instead. Of course, this means that the state of your actual home does not matter.
A development investor will usually purchase all of the homes in a single area. Holding out for longer can get you a higher price in some cases.
Finally, wholesale investing is the process of buying up homes on a very large scale. Usually done by investment companies, wholesale real estate investing can be completed very quickly. This is because most of the time these investment companies have a list of buyers waiting for homes to become available, and will turn around and sell your home at a markup.
Though the answer to this question will likely depend on what type of investor you are selling to, it’s still important to ask. In most cases, you’ll have to do very little work to your property before selling it to an investor.
However, if they’re looking for a rental property to put on the market immediately, or will be living in the house while they flip it, they may want several inspections and repairs to be done. Keep this in mind while negotiating: if you have to do work on your home to close the deal, make sure that you see a reflection in the final sale price.
Always ask an investor how their payment will work, and how they came up with their offer. Most of the time, selling to an investor means that you will get a complete payment in cash. While this can be tempting (especially since you may not have to give a real estate agent a cut if you’re getting an offer), keep in mind that an investor wouldn’t make an offer if they didn’t think that they could turn around and sell it for more money.
Make sure you’re clear on how much you can expect to receive, when you’ll receive it, and how they determined that figure. It may also be worth asking them if they’re willing to cover your closing costs to expedite the process – like any taxes or insurance charges.
Investment in real estate is different than buying a new home. The timeline moves much faster, and you can expect to close the deal in a matter of weeks. There is no waiting around for a loan, fewer inspections and no repairs to be done in some cases, and no holding the property in escrow.
With that in mind, you have to ask when you’ll have to leave the property. While getting cash in your pocket quicker is always a good thing, you also want to make sure that you have enough time to pack everything up and move into your new home.
There’s no one reason why you may want to consider selling to an investor. Maybe you inherited a house from a relative, are currently losing money on a rental property, or have already listed your home and didn’t have interest from potential residents.
Whatever the reason, you should always ask the above questions when selling your home to an investor. You want to make sure that you’re getting a fair shake.
Contact us today if you’re in Austin and want to sell your home quickly! We’ll offer you fair market value for your property, saving you the hassle of having to list your home and deal with real estate agents. Best of all, you’ll have the cash in your bank account in no time at all!
Lisa is a local real estate investor in Austin Texas.