Deciding whether to sell your home to an investor or list it with a real estate agent can be a difficult choice. Taking advantage of an all-cash, no-waiting, no-strings offer can make some home sellers wonder what the catch is. Here’s what you should know about how your sale will differ based on who you choose to sell to, and factors to look for to help you decide on selling with an investor vs. a real estate agent.
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What’s the Difference Between Investors and Regular Homebuyers?
Your average homebuyer is looking for their new primary home—a permanent residence that they’ll live in themselves. Investors, on the other hand, are individuals or entities who purchase real estate with the intent to generate a profit. The most notable difference between selling your home to an investor vs. a homebuyer is that an investor is likely to give you an all-cash offer with no need to repair, renovate, or stage your home, and the transaction can usually be completed faster.
Common Types of Investors
There’re four common types of investors:
- House flippers
- Wholesale investors
Buy-and-hold investors often purchase properties with the intention of renting them out for a regular income over time and eventually selling them in the future. They may become a landlord and manage the property themselves or reap passive income from afar with the aid of a property management company. In other cases, buy-and-hold investors buy properties in areas with high appreciation rates with the intent to sell them later for a profit. Some combine the two strategies.
House flippers look for properties that they can buy at a low price and renovate quickly to sell for a higher price. You see them a lot on home improvement shows. They’re also known as fix-and-flippers, rehabbers, and residential re-developers.
Wholesale investors aren’t actually looking for ownership of the property, but instead act as intermediaries between sellers and other buyers—who are usually investors. By matchmaking sellers and investors, wholesale investors can earn money with reduced financial commitment.
Lastly, iBuyers, or instant buyers, are companies that have the means to buy homes with cash and use algorithms to evaluate homes quickly. Interested sellers can find a cash buyer online, submit information about their homes, and get a cash offer in as little as 24 hours—without requiring any renovations or repairs from the seller. The iBuyer then goes on to sell the home to a buyer.
When Should You Sell Your Home to a Cash Investor?
There are many benefits of selling your home for cash. If you need to sell your home fast or want to avoid the time and expense associated with listing your property through an agent, then a cash investor may be the way to go. Consider your situation and ask yourself if any of these apply:
You Want a Convenient, Hassle-Free Sale
Selling to an investor can be a great option if you’re looking to make your home sale as simple and easy as possible. With no need for repairs, staging, or showings, you can skip out on a significant amount of prepping your home for sale. Investors are also typically able to close on the deal quickly without any financing delays—an all-cash offer means no waiting on a lender to approve a loan, and no risk of the deal falling through because a lender said no.
Additionally, an investor will often leave the closing date up to the seller, which can be much more convenient for your moving schedule than a traditional home sale. As long as you do your research and make sure you’re dealing with reputable investors, this could be a great way to get rid of your property fast and get cash in hand quickly.
You Need to Sell Your Home Fast
If you need to sell your home fast—say you need to move for a job, or you inherited a second property and don’t want to pay taxes on it—an investor may be the way to go. Cash offers make the closing process simpler and eliminate several potential delays, such as getting a loan and making appraiser appointments. Often, investors will also make a purchase offer “as-is,” which waives the need for a home inspection.
You also save time beforehand, as selling to an investor usually eliminates the need for renovations and repairs beforehand. This can save time overall and get you into your next home much sooner. It is important to weigh all options before deciding what is best for you and your family, but if speed is of the utmost priority, selling to an investor could be the right choice.
You Need to Sell Your Home As-Is
If you need to sell your home and don’t have the time, ability, or money to make necessary repairs or renovations, then selling your home as-is may be the best option—and investors are the most likely buyers to make an as-is offer. This can even work out if your home has major disrepair that would be expensive to fix, such as a cracked foundation or termite damage, since some investors are simply looking for the value of the land.
When Should You List Your Home with a Real Estate Agent Instead?
Selling your home to an investor has several important perks, but there are some equally important factors to take into account before you take the plunge. Be sure that these don’t apply before accepting an investor’s cash offer:
You Want to Maximize Your Profit
The biggest reason not to sell to an investor is that you’ll probably leave some money on the table. Since they’re looking for a profit, investors are incentivized to buy your home as cheaply as possible, and if the sale price rises too high, they’ll look elsewhere. A traditional homebuyer, on the other hand, can become motivated to offer above asking price if they fall in love with your home.
If getting top dollar for your home is more important than selling fast, listing with an agent may be a better option than selling to an investor. Your real estate agent will have the motivation and experience needed to get you the best deal possible—the more money you make, the more money they make on their commission. An agent can also help you navigate through the process of marketing your home and putting it in its best light, so buyers will be motivated to pay more for it. They’ll also be able to help you negotiate with any offers that come in. While it may take more time, you’ll likely walk away with more money in your pocket.
Of course, if you choose a trustworthy investor, you can get the best of both worlds: a fair, competitive offer with all the speed and convenience of an all-cash, as-is offer. Take a look at how we buy houses at Cash is King and see for yourself.
You’re Not Comfortable Selling to an Investor
Whether you’re not comfortable with navigating something as big as a home sale on your own or you’re not comfortable with not knowing what will happen to your home, emotions are a valid reason to choose to sell with a real estate agent over selling your home to an investor.
If you’re not comfortable selling your house FSBO, then working with an agent can help give you peace of mind. An agent will list your property on the market and work to protect your interests throughout the process. They’ll also be able to provide advice on pricing, staging, and marketing. Agents have access to a network of buyers who are interested in purchasing homes similar to yours and can help find them quickly without sacrificing any equity. Plus, they know how to handle negotiations so that you get the best price for your home without compromising on terms or conditions.
Some home sellers also prefer to know who’s buying their home. Many are comforted by the idea that their home is going to someone who will care for the home as they did and enjoy the same kind of emotional attachment to it. Selling to an investor may feel more clinical. In some cases, the seller may not even know who the property ends up owned by, or what happens to it.
Are You Ready to Sell Your Home?
Selling your home to a cash investor or listing with a real estate agent are both viable options depending on your individual needs and circumstances. However, there are advantages and disadvantages associated with each, so it’s important to consider what is most beneficial for you. Ultimately, the best option depends on your timeline, budget, and desired outcome. Taking the time to research your options can help ensure that you make the right decision when it comes to selling your home.
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