20 Feb How To Find an Investor to Buy Your House
It’s a seller’s market in much of the United States and you have a house to sell. But there’s a catch: you need to sell quickly.
If the thought of finding a real estate agent, readying the house for showings, and waiting for the sale to close seems like it will take too long, you may have another option. Real estate investors often buy homes as-is and for cash, making for a quick sale.
Who are real estate investors?
There are several types of real estate investors. A professional home investor may be a person or a company that buys homes as all or part of their long-term investment strategy. Or they might be one-and-done buyers planning to take on one home to resell at a profit. Residential real estate investors may own one or many investment properties.
You’re likely to be familiar with the concept of house flippers from television series such as “Flip or Flop.” Flippers buy homes that need a lot of work but are often in neighborhoods with buyer interest or have a floor plan that appeals to today’s families. They buy below market value, then quickly gut and remodel before putting the home back on the market in move-in condition.
A longer-term strategy of real estate investment can be buying homes in desired residential areas, then renting them out, often over many years. These landlords could be individuals or companies. These investor landlords may put some money into repairs and upgrades, but typically spend a lot less than house flippers before the home’s next residents move in. Some buy when the owner is underwater on their mortgage, then rent it back to the people already living there.
Often referred to as wholesale investors, these investors buy houses buy below market value, but don’t plan to make any repairs or upgrades before putting the house back on the market. Quick resellers often buy a lot of homes at once, making less profit off each home individually, but making up for it in volume.
Some real estate investors with a long-term financial strategy may buy homes to hold onto until the market improves. Others buy homes in an area they know will be bought out by a local government with plans to extend a road or rezone for business several years in the future.
Instant Buyer, iBuyer, Cash Offer
The newest category of real estate investors is referred to in real estate jargon as an iBuyer or instant buyer. These home-buying services use technology and data collected on home sales within a particular market to make offers to homeowners. Some don’t even view the home before making an offer. Some real estate companies have recently gotten into the iBuying business in some markets as has Zillow and national brokerage Redfin. Other companies start with the sole purpose of making instant offers and buying directly from homeowners.
How real estate investors differ from regular home buyers
Most homes are purchased by families, couples, or individuals who buy a house to live in. It may be their primary residence or a vacation home. They may be downsizing to a smaller house or looking for a bigger place for a growing family.
Traditional home buyers typically work with a real estate agent to find a home in their desired neighborhood or city. They look for houses they can imagine themselves living in now and in the future. Many home buyers want a move-in ready home, rather than a fixer-upper, and often ask for repairs to be made before they close on the sale.
If a family finds their dream home, they may be willing to pay more than the house is listed at if other buyers are interested, too. This can drive up the price of homes in a market. A homebuyer may have in the back of their mind that the home in a particular area might sell for more than they paid for it, but their primary reason for buying the home is not to make money.
All residential real estate investors have one thing in common: they hope to turn a profit.
A house that interests a real estate investor may have little appeal to home buyers as-is. This includes homes that need repairs or maintenance, haven’t been updated in decades, have a costly structural defect to restoration, or landscaping that needs a lot of work. Real estate investors are more likely than the typical homeowner to have the cash on hand to make those fixes. They can see beyond the problems to the home’s true potential – and their potential profit.
Real estate investors may ask you right off the bat how much you owe on your mortgage. This helps them to understand your bottom line. The typical home buyer will never ask you this question because it isn’t a factor in their decision to buy your home. You’ll want to consult a real estate attorney to review any contract you plan to sign when selling your house.
Before you sell to a real estate investor, meet with a real estate agent or two to find out what your house is worth. Ask about market trends and anticipated development in the area. You’ll go into discussions with real estate investors armed with more knowledge to make a smart decision.
Reasons to sell a home to an investor
There are many good reasons the traditional route to sell your house is not the best plan for you.
Divorce. You and your soon-to-be ex-spouse want to be done with the marriage quickly and need to divide assets. This includes selling the house you bought together.
Foreclosure. When you’re way behind on your mortgage payments and don’t see another way out. The stress is unbearable.
Unfixed fixer-upper. You had good intentions of tearing down walls and gutting the kitchen and bathrooms to turn the house into your dream home. But life happened, and you just don’t have the time or money.
Financing issues for buyers. The house you own is unsafe or isn’t up to code, so it won’t likely appeal to buyers whose lenders, such as Federal Housing Administration (FHA), have a lot of requirements before approving a mortgage. Yours has mold and termites, two deal-breakers.
Timeliness of move. You want to maintain control over the move-out date. Or you may be buying a new home contingent on selling your current home.
Make your next purchase easier. You plan to move to a hot market where homes seem to go from “for sale” to “sold” in a matter of days. To better position yourself to act quickly, you don’t want to be slowed down by selling your home and buying the next at the same time.
Job relocation. You’ve got your dream job in another city – or country – and you want your family to move with you as soon as possible.
Inherited house. Grandma left you her house. Wonderful! But you live in another city and have no emotional attachment to the house. Or perhaps you and the other heirs don’t have a good relationship. You weren’t expecting to inherit, so any money you make on the sale is a windfall.
Few buyers in your market. Yours is not a hot real estate market, but you want to sell. You don’t have the luxury of waiting a year or two until the market improves.
Illness or aging. Your grandmother has been diagnosed with Alzheimer’s and is moving into a memory care facility. She needs the proceeds from the home’s sale to fund her move. Or perhaps you’ve been in a car accident and now use a wheelchair, and your house is a tri-level.
Death, tragedy, or crime. If a family member died unexpectedly in the house or you were the victim of a violent crime that took place there, you may never want to step foot inside it again. Selling can help you move on emotionally.
You’ve done the math. You’d have to spend a small fortune: paying 6% to 7% to split between your listing agent and the buyer’s agent, making costly indoor repairs, and hiring landscapers to give your home curb appeal. You’d rather not.
When you’re ready to sell your house quickly
Ready to sell quickly? We are trusted, local real estate experts who can purchase your house quickly, reliably, and fairly, and we can even purchase properties as-is: no repairs or cleaning necessary. Give us a call today at 994-SELL.