Selling your house isn’t an easy process. It usually comes with stress, and sometimes it can get drawn out over several months. For these reasons, some home sellers explore other options like selling to a property investor.
Working with a property investor can save you time, stress, and money—but is it worth your while?
In this post, we’ll share everything you need to know about selling to an investor so you can decide if it’s right for you.
What does it mean to sell to an investor?
Selling a home to an investor means you don’t have to worry about getting your home market-ready. You’ll be able to skip over repairs, showings, home inspections, and dealing with lenders.
An investor will simply make a cash offer based on your home’s market value. From there, you get to decide whether you accept their offer or not.
What is a real estate investor?
A real estate investor—or property investor—buys outdated homes and renovates them to make them marketable. Once upgraded and repaired, they resell them for a higher price, thus earning a profit from the difference.
But that’s not the only way they can turn a profit. Some investors look for properties to rent. This process might also include making renovations or turning a single-family home into a multi-unit property.
Other real estate investors purchase properties purely to build equity. That means they purchase a home and hold onto it until the market changes, at which point they sell for a profit.
Property investors vs. traditional buyers: the pros and cons
Working with a property investor and a traditional buyer both have their pros and cons. Ultimately, it depends on your situation and personal preferences. To help you decide, here are some things to consider about each option.
An investor can help make selling your home move a lot faster because you can sell it as-is. That means you don’t have to worry about making costly repairs or cosmetic renovations. These kinds of transactions also save time because they close fairly quickly.
On the downside, don’t expect to earn the same profit that a traditional sale could earn you. Investors make cash offers based on the current condition of the home. So if you’re selling an outdated property that has major issues with electrical wiring or plumbing, they’ll consider that before making an offer.
It’s also important to be aware of potential scammers. With cash sales, you don’t always know who you’re selling your property to.
- No renovations or repairs are needed before selling
- Get an offer on the spot after they inspect your property
- Shorter closing period
- The profit you earn will be less than a traditional sale
- You don’t always know who you’re selling your property to
Selling your home to a traditional buyer is the safer route because you’ll work with a professional realtor, verifiable buyer, and an FDI-certified lender.
However, it can be a long, drawn-out process that requires a lot of time and money. For instance, buyers will often request a home inspection—or their lender will require it. The inspection will check for problems with the foundation, electrical wiring, plumbing, and HVAC, among other things.
If any issues are found, the buyer or lender will request repairs to be made before selling. If too many repairs are needed, or they’re too costly, the entire sale could fall through—putting you back at square one.
Not only that, but the closing period of a traditional sale can take anywhere from 30 to 60 days.
- Poses less of a risk
- You can potentially earn a larger profit
- You may need to invest in repairs and renovations
- Repairs can potentially ruin the sale
- Not guaranteed to sell the property fast
- Lengthy closing period
Will an investor pay fair market value?
If you’re interested in selling your home to a property investor, you have to think about what kind of cash offers you’ll receive. Will they make an offer based on fair market value?
That depends on the condition of the property, but it’s safe to say an as-is home won’t have the same value as one that’s been renovated. Even if you’re in a million-dollar neighborhood, you’re not guaranteed to get a high price.
Your fair market value is based on the current condition of your property. That being said, investors do pay close to fair market value based on the condition.
Are you better off selling to a company like Simply?
If you’re on the fence about selling to a real estate investor and a traditional buyer, then consider another option: selling to Simply.
Selling to Simply comes with a lot of benefits like:
- Receive a top-dollar cash offer based on fair market value
- Closely work with our team of experienced real estate professionals
- Sell your home as-is
- Close the home sale fast
Get an offer in less than 30 seconds now!