Real estate investors often get a bad rap when it comes to purchasing homes. Much of that reputation is based on myths about how investors work, and the actions of a few bad apples. Before you discount the idea of selling your home to an investor, consider the following points.
You Can Sell Your Home As-Is
One of the main benefits of selling to an investor is the ability to sell your home as-is. When a normal buyer purchases a home, they often require the completion of an inspection. If the inspection reveals any issues, they may look to have the sales price discounted, require repairs be made, or may even withdrawal their offer. In contrast, investors often intend to make certain improvements to the property themselves. Since that is their primary goal, they are often willing to purchase properties regardless of any preexisting issues.
You Can Sell Your Home Fast
Unlike homes sold in the regular housing market, investors rarely do a lot of negotiating when buying a home. Their business is most successful when it moves quickly, making a long, drawn out back and forth less desirable. Often, an investor will approach you with a competitive price from the beginning. There will be very few, if any contingencies, allowing the purchase to go through based on the condition of your home today. Additionally, once an offer is made, an investor will rarely back out of the deal unless you are unable to come to a mutually acceptable price during the initial negotiations.
Investors generally complete sales in cash. This means they do not have to have the property appraised in order to secure a loan. Since they often buy homes in their current condition, they don't have to allocate time to having an inspection completed either. Without having to complete these steps, and avoiding the need to involve a lender entirely, investors are able to complete a sale much more quickly than a traditional buyer. In some cases, a transaction that can take months through traditional sales mechanisms can be completed in as little as a few days.
You Pay Less in Fees
Working directly with an investor means you don't have to work with a realtor to complete the sale. While realtors charge commissions and fees for their work put towards selling your home, an investor has none of this overhead. Essentially, you are bring a real estate transaction back to the wholesale market instead of paying the markups associated with retail sales.
Even if an investor offers you a lower price than what you may receive on the "retail" housing market, you save money by not having to pay for the services associated with a realtor. This can actually give you a chance to come out ahead, and not behind like many people think. Plus, the speed of the sale can let you get back to your life more quickly.
Your Mortgage Can be Paid Off
Many people are under the misconception that working with an investor means that your mortgage will not be paid off as part of the purchase process. While there are options available that allow them to purchase homes with other sales conditions, most purchase properties "fee simple." This means that your mortgage will be paid off as part of the settlement associated with the sale. That means, you don't have to worry about your mortgage being overlooked, making it an ideal transaction for all concerned parties.
Please make sure that you do your due diligence to make sure that the investor who is purchasing your property is legitimate and not defrauding you in any means by reading their online reviews, calling their references and talking about your situations to your friends and family to get a second opinion.