Home sellers can avoid the stress of a complicated home transaction process and sell directly to a traditional home investor. These kinds of sales may allow sellers to bypass things like inspection contingencies and avoid appraisal concerns or buyer financing issues.
Even if you start off intending to sell to a traditional buyer, you might end up getting a compelling offer from an investor, perhaps one with minimal contingencies and the promise of a quick close. But before you accept, it’s important to understand how the process differs from a typical transaction. And if it feels too good to be true, it probably is.
Read on for everything you need to know about selling your home to a professional home investor.
What you should know about selling your house to an investor
- Selling to an investor saves time and hassle, but it’s not for everyone.
- Personal situations, like a job relocation, divorce or potential foreclosure, are some common reasons people end up quickly selling a home to an investor.
- When you sell to a traditional investor, you can expect a quicker close, an as-is sale and an all-cash offer.
- When selling to a private investor without a listing agent, you need to do your research to protect yourself from scams. There are plenty of companies that buy houses — make sure to use a reputable one.
How do traditional buyers and house investors differ?
The term buyer is used to broadly describe people who buy homes, but buyers can come in varying forms such as traditional buyers and traditional home investors. The type of buyer you accept an offer from can impact the rest of the transaction process.
Who are traditional home buyers?
Traditional buyers are people like you, when you bought your current home. They’re looking to purchase a property to reside in, either as their primary home or as a vacation home.
A traditional buyer will make an offer based on their perception of your home and their research on its market value. There’s also an emotional component to the purchase. Maybe your home has a unique quality they’ve been looking for, like a big yard for their kids or the perfect layout for their needs. Traditional buyers may pay more than market value for the features they crave, or they may be willing to pay above asking price in a multiple-offer scenario.
Who are home investors?
A professional home investor is either an individual or a company that buys residential properties as part of a business or investment strategy. Individual investors may own just one or two investment homes (that they either keep and rent out or flip and quickly resell), but companies that buy houses usually do so in bulk.
Common reasons to sell to a home investor
While most people sell their home the traditional way, there are a few scenarios where selling to an investor might make the most sense.
If you’ve inherited a property from a family member and you don’t plan to live in the home, you won’t want it to sit empty for too long. Not only can a vacant home be a target for vandalism, but if you sit on the property in a fast-moving real estate market, you could be on the hook for capital gains taxes.
If you’re behind on payments and need to sell quickly, an investor might be a good option.
If your home requires a lot of updating or repair work to be attractive to traditional buyers, it may be appealing to sell your home as-is to an investor.
No financing possible
If the home you’re selling doesn’t meet safety or permitting standards, most lenders won’t finance a loan for the property, which can make it hard to sell to a traditional buyer.
Need timeline flexibility
If you’re selling on a very specific timeline, you usually have more control over the close date with an investor, since they’re not timing a move-in date the same way a traditional buyer is.
Currently in escrow
If you’re trying to time a sale and a purchase at the same time and your new purchase is contingent on your old home selling, going with an investor offer can speed up the process.
Relocating for work
Often a job relocation requires a faster-than-average timeline. Selling to an investor can be faster than waiting for the perfect buyer.
Divorce settlements require both parties to divide the assets, and selling fast and splitting proceeds can often be an easier way to go.
Doing repairs, taking listing photos and scheduling showings with tenants living in a house can be complicated, so people owning rental properties often turn to investors when it’s time to sell.
Even if your personal situation doesn’t fall under the common reasons listed above, you might benefit from selling a house to an investor. Looking to sell your house to a home investor? Get in touch with our team at St. Louis Realty Advisors. We buy houses in any condition and are ready to extend a fair cash offer to purchase your property allowing you to sell your house fast. To get started give us a call at 314-270-1601.