“There’s no way I can come out ahead by selling my home to an investor.” You hear that all the time, but at the same time there are numerous rehabbed homes on the market today because there are so many people selling to investors. Why is that? Do they know something that you don’t? Have you often wondered if maybe selling to an investor could be the best approach for you? Let me tell ya, it just might be. Don’t say no unless you look at some of the advantages. Let’s take a look.
1 Pay $0.00 Commission
This is probably the number one reason many choose to sell their home to an investor. When you sell your home through a real estate agent, the cost of commission can be high. Most will charge 6-7%. Sometimes they will sell for an even higher rate, and then they will charge you an “administrative fee” on top of the commission. These fees can range as high as $1,000 in addition to the cost of the commission.
2 No Closing Costs
Investors will in most cases pay all closing costs, including Title Insurance, which is usually the responsibility of the seller. This can save you quite a lot of money as total fees associated with title insurance can run as high as $2,000. This is a negotiating point, and one you would do well to remember if you decide to sell to an investor. In the end, you want to come out with exactly how much money you have in equity leftover.
3 Close on YOUR Timeframe
Investors can close FAST. Most investors can close in about 10-15 days. This could be your number one selling point if you are being relocated to another town, are behind on your mortgage, getting a divorce, have lost a loved one, and many other reasons. The reason they can close so quickly is because they are not waiting on a traditional mortgage complete with appraisals and loan approvals. Many investors use what are known as “Hard Money Lenders” or “Private Money Lenders”. These companies charge a large interest rate, but they don’t require all the bells and whistles that a traditional mortgage company that is regulated by the government does. They act like cash and these lenders know that time is of the essence. Most investors already have a hard money lender that they have a relationship with so can get the job done quickly. Ever waited on a traditional mortgage to close? It can take anywhere from 30-60 days and require a lot of paperwork from you. Or, maybe you don’t want to move for 4 months, investors are also ok with this. They work on YOUR time frame.
4 No Sellers Concessions
Many times when negotiating the sale of your home through the use of an agent, buyers will ask you to pay several thousand dollars towards their closing fee. In today’s market in a regular starter home, this is usually $5,000. This is especially true when your buyer is using an FHA loan. FHA requires this of the seller in order to approve the loan. So, if you actually get the price you want for your home, then you will pay for the buyer’s closing, which will lower the amount you actually receive once your house closes. If this is confusing, give me a call, and I can help explain better. 816-866-1332.
5 No Repairs
This is a big plus for homeowners. Here’s the traditional process when using an agent and selling through the Multiple Listing Service using a licensed realtor if you’re not familiar with it….
1) – after much negotiation, your home goes under contract
2) -inspectors come through and nit-pick every single little thing that could be wrong with your house from a leaky faucett to a new roof or HVAC system,
3) -re-negotiation tim! This is almost always where you are out several more thousands of dollars, OR the closing is delayed because you have to fix all these things requested by the buyer (hassle!),
4) -finally you get everything fixed, which costs a boatload of money, OR you have renegotiated your price down even more, or both depending on how many “little things” the inspector finds, then
5) -the buyer’s lender orders the appraisal, oops …maybe this doesn’t come in high enough, now you’re back to re-negotiating again,
6) -finally you close with a LOT less money than you thought you were going to get in the first place, even after paying commission and title fees. You literally could be paying up to $10,000 in renegotiation costs.
You will experience disappointment at the closing table when you see how much money you will actually receive. This is when you say to yourself…”I should have sold to that investor. I ended up with the same amount of money, but I experienced a LOT more hassle!”
6 Save Your Credit — Avoid Problems such as Foreclosure, Divorce issues, Loss of Job
Investors understand your dilemma and are sympathetic to it. Since investors can close quickly, you can avoid the humiliation and loss of your good credit by selling to them. Or maybe you are going through a nasty divorce, and need the house to sell quickly in order to finalize the divorce (we’ve all been there…including me). Maybe you lose your job and you can’t afford to move and make the payments anymore. Many times, investors are willing to pay for a moving truck for you. This could be negotiated. Or, maybe you are a private person and don’t want a real estate sign in your yard.
7 You will sell “AS IS” and do not even have to Clean the House Out
Leave anything you don’t want. Investors will clean the house out for you. This is especially helpful in a probate sale. Relatives can go get what they want prior to the sale, and then you can leave the rest. Yep, don’t worry about cleaning out the shower, kitchen, bathrooms, basement or anything! They will take care of all of this for you. Repairs? Forget about it! Investors will do all the repairs. You sell the home completely “as is”. Do NOTHING to it, and just walk out the door. With a formal listing, you HAVE to clean out EVERYTHING. If you don’t, your buyers can hold off closing until everything is removed. Completely.
Getting Down to Business
As you can see, on the front end selling to an investor sounds like a bad idea because the price you get for your home could be less than listing it, but in the long run, you can save both time and money. Just to recap, depending on the price of your home, you can run into several thousand dollars in fees, commissions, repairs, and sellers concessions. In addition, you can save headaches by closing on your own time-frame.
We may be interested in buying your house. Call me today at 816-866-1332! Or, send an email to [email protected]
Here is a special note if you are wondering about us…who we are…what’s really going on here? I want to add one more thing. Yes, we are a business, and yes we are doing this to make money. But, and here is the big “but” –we don’t make as much as you might think. We do a LOT of work but we do this because we love it, and we want to help. All the marketing people in the world tell me I should not add remarks such as these. We are not these marketing people. We are people just like you who are just trying to survive and make a living. I hope you call if you are ready to sell (or click on the link above to find out what your home is worth.) Take care and all the best to you!**Jesus is “The Way”. We are a Christian company.