Should you sell to an investor? There’s been a lot of talk in the news about the rise of institutional buyers, but does this option make sense for you? Selling to an investor comes with many pros and cons, and I want to go over them with you today.
The difference between selling to a family and selling to an investor comes down to intention. A family wants to buy your home so they can move into it and build a life for themselves. However, an investor wants to make money either renting your house out or flipping it. Many institutional buyers across the country are buying homes and even entire neighborhoods for this purpose.
There are a few types of institutional buyers. Some want to buy and hold your property, which means they’re counting on rental income and appreciation to make their money back. Usually, these buyers are looking for homes that are already in good condition. On the other hand, flippers are looking for homes in poor shape that they can fix and sell for a profit.
Selling to an investor has a few benefits, but the biggest one is that you don’t have to worry about financing. Financing issues are the most common reason why deals fall through; plus, the close will be much shorter. Investors will also buy your home as is, so you won’t have to make any repairs if you don’t want to. However, selling to an investor has a significant downside: You’ll likely get less money than you would by putting your home on the open market.
Buyers on the open market are usually looking for a long-term home, and they might form an emotional commitment to your property. This can push them to offer a premium that investors aren’t willing to pay. Competition between buyers and a strong marketing strategy from your Realtor can also help push up the price.
If you’re considering selling to an investor, ask yourself a few questions:
- Do you need to sell your home quickly?
- Is your home in good condition?
- Do you have the cash to make repairs?
- What are your plans for the future?
Whether or not you should sell to an investor depends on your situation. Whatever your situation calls for, my team has what you need. We have buyers lined up ready to purchase your home from day one. We also have our own iBuyer program if you decide to go that route.
Whatever your choice is, please call or email me with any questions. I am always willing to help!