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The Pros And Cons Of Selling Your Home To An Investor

In terms of selling a home, most people would start looking for realtors to work with simply because that’s the traditional way things have always been done. However, not everyone has positive experiences working with real estate agents. Some share unsavory encounters like delayed closings, prolonged transaction timelines, and the like.

Fortunately, working with a realtor isn’t your only option for selling your home. You can also look for home investors to advertise your property up for sale. Luckily, this post will take a closer look at the pros and cons of selling to a home investor to help you decide if it’s the right method for you. Keep on reading to learn more.

Pros Of Selling Your Home To An Investor

Home investors are another group of individuals that participate in the real estate market. It’s said that working with them brings you the following perks:

 

  • Faster Transactions

Listing and selling your home with a realtor are time-consuming. First, your home will need to be fixed before it’s ready to list. It then needs to be marketed through open houses and advertising, taking an average listing period of 3-6 months. Yet depending on the market, it could take as long as 12 months. Once you’ve finally found a prospective buyer, they’ll need to qualify for financing first – further delaying the transaction and can even cause the deal to fall through.

 

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But by selling to an investor, you can close the deal within a week or two. This is because the sale of the house isn’t reliant on approved financing, home inspections, appraised value, or other necessary steps when working with a realtor. In short, it bypasses all the time-consuming processes, expediting the process considerably and allowing you to sell your home faster.

Transacting with an investor may also be suitable if you wish to quickly sell your home during a public health crisis or other trying times.

  • It’s Convenient And Less Costly

When you sell your home to an investor, you sell it ‘as-is,’ taking away the general responsibilities that usually entail during a sale. As mentioned before, you don’t have to stage your home, accommodate for the pre-sale inspections and appraisal, and other preparatory stages, providing convenience while reducing the stress in the process.

Other than the convenience, selling your home to an investor can also be cost-effective. By selling your home as-is, you can avoid making repairs and improvements. Whether you don’t have the funds or simply don’t want to spend money on costly repairs and improvements, selling your home to an investor is a great option.

Another thing that makes selling homes as-is cost-effective is that you don’t have to pay a commission fee. Realtors don’t work for free and you’ll have to pay for their services with a portion of the selling price, which is usually 6%. So, if you’re selling your home for USD$250,000, your real estate agent will get USD$15,000 from the deal.

  • Get Instant Cash

One of the most important perks of selling your home to an investor is that you get access to instant cash payment. This is beneficial if you’re experiencing financial issues. Investors buying homes as-is often pay cash and flip homes at scale. Thus, after signing the contract, you get full payment for your home right away.

Cons Of Selling Your Home To An Investor

Nonetheless, dealing with a property investor isn’t always filled with unicorns and rainbows. Beware of the certain possible drawbacks of the transaction. Some of them include:

  • Get Below Market Value Offer

While you may be able to skip the hefty commission and other related expenses in listing your home, selling it to an investor usually means you’re getting below market value. An investor may as well be discounting the value from 20-40 percent of what it’s worth. This is obviously a ton of money you’d be leaving on the table.

Investors know the advantages behind a cash offer as well as the potential risk of buying homes as-is. This discount is deemed necessary to quickly sell a home without any verification on their side.  Keep in mind that an investor’s goal is to buy homes cheaply, so they can fix them and sell them at a higher price.

  • Anonymous Purchase

When buying a home, investors aren’t required to reveal their identity. They also don’t need a license like realtors. Thus, there’s a possibility that you may not know who’s buying your property. For all you know, your buyer may be from a shady organization. But you can prevent that risk with contracts, ensuring that you don’t bear any responsibilities once the transaction is complete.

  • You May Be At Risk Of Scams

In any financial transaction, there’s a risk of fraud. In terms of real estate transactions, there’s a risk of meeting scammers posing as investors, convincing you to close the deal right away, and running off with your money and property titles. Hence, it’s important to be alert and do your homework to avoid falling into scams.

Takeaway

Selling to an investor allows you to close the deal faster and get the payment right away. It’s far more convenient than working with a realtor providing a better home selling experience. That said, it’s not always the best option for everyone, especially if you’re expecting to cash in above the market price. Plus, it may put you at risk of fraudulent transactions, which can leave you with more headaches.

If you’re considering selling to an investor, you want to do careful research and verify the credibility of the buyer so you don’t have to fall for real estate scams.