If you’re selling your home and an investor walks in offering you all cash, you might think you’d died and gone to heaven.
Most of the home buyers you’ll meet are individuals, couples or families looking for a place to live. They might be looking for their “forever” home or a place to raise their young kids, and they probably consider their home an investment, but they aren’t what we would call investors.
Investors are people or companies that want to purchase your home in order to make money. So negotiations will go differently (and hopefully easier) than they would if the buyer was going to live on your property.
The Pros of Selling Your Home to an Investor
As-is purchase. The investor isn’t planning on living in your home so he or she (or the company), doesn’t care if your kitchen has been updated with a vibrant backsplash or if your toilets are new. In fact, many investors look for homes that are old or outdated so they can fix them up and flip them.
Little risk you won’t close for lack of funds. Most investors pay for properties in cash so you won’t have the uncertainty that comes with a buyer applying for a mortgage. Even when a buyer has been preapproved for a loan, the lender can decide the buyer’s credit-worthiness has changed and refuse to issue the funds needed to buy your home.
Before you sign a purchase agreement you should ask the investor for proof of funds. This can come in the form of bank or money market account statements that show cash or liquid assets in an amount that exceeds the purchase price of your home.
Quicker closing. Since most investors purchase with all cash, you can sell your property as soon as your two parties agree on the conditions of sale. The average time it takes sellers to close with an all-cash investor is two weeks. If you’re selling to a buyer who needs a mortgage, it’ll take you 60 days’ minimum.
Potential for flexible purchase arrangements. If your home is underwater or you’d like to get out of the real estate game altogether but don’t want to move, selling your home to an investor could be the way to go. Some investors will agree to take over your mortgage and some will even rent the house back to you in what’s called a sale-leaseback transaction.
If you’re ready to explore the advantages of selling your home to an investor, contact our team at St. Louis Realty Advisors by giving us a call at 314-270-1601.