This is a guest post by our friend Royce of Real Estate. (please link to http://www.facebook.com/royceofrealestate)
Investors in the real estate world have gotten a bad rap, and arguably, for good cause.
The suits on Wall Street created financial products in the last boom that inevitably led to massive losses on Main street, leaving homeowners stranded, bewildered and embittered.
Then, many a liquid investor and hedge funds took advantage of bargain basement pricing on homes and capitalizing on the banks losses. All across the nation as many people were losing their homes, cash buyers bought them in droves and capture equity in the following years.
In the same return, those same investors bought in such quantity that it allowed the market to start to recover by clearing out the droves of underwater, vacant and distressed homes. Although, there were still opportunistic buyers that would do little to improve a property and sell it for massive profits.
So, is selling your home to an investor a good thing? A waste of your equity? Or a saving grace?
Let’s explore what selling your home to an Investor means for you in today’s marketplace.
The Advantages
1) Convenience
Inasmuch as homeowners may treat their homes like investments, a property is not a liquid asset. Having a Buyer that make that home almost liquid in a short amount of time, has a premium. A “regular” Buyer is typically given an inspection period of at least a week, can ask for any repairs they desire (often much to the chagrin of the owners) and back out during the majority of the inspection and loan period. Having inexperienced agents, emotions running high and nitpicky Buyers can complicate any hurdles tremendously and cause deals to fall apart and leave homeowners back at square one.
If you are selling your home to an experienced Investor, though, they will typically shorten if not waive their inspection timeline, deal with the homeowner directly, have cash on hand to close and be prepared to perform at your preferred date and time.
Of course, you will be selling your home at a price where they can still make a small profit, but your peace of mind and the convenience goes a long way.
In fact, the cash equity in people’s homes is often the one thing hindering them from moving out of state to take a new wonderful job, pay off their debt, move to their next home or finalize a divorce. If a homeowner is under a tight deadline for any of these types of events, an experienced cash Investor who can perform is worth their weight in gold.
2) Simplicity
This ties into the convenience factor, however, by cutting out the middle men and dealing with a professional Buyer you trust, selling your home to a local Investor is much more simple than going the “traditional” route.
When listing your property with agents, you typically can expect agents and their picky Buyers coming through your house, commenting on everything they would change or don’t like and expecting you to keep the home in “show ready” condition at all times.
Depending on your local market, the sales process could take months and months if your agent isn’t aggressive enough, if the pricing is wrong, the time of year is slower or all of the above. In fact, you’re not guaranteed it will sell at all.
If you are going through a divorce, have lots of pets, don’t keep a “show ready” home, or work really odd hours, going the traditional route of selling your home could become a lot more complicated and frankly, a hassle. It can be draining to have your house on display to the world online and in person. Then, during the inspection process, it can be argumentative and convoluted about who’s responsible for what, what’s “fair” for each party and the agents may or may not be communicating in an effective or efficient manner, either.
With a cash buyer, they care about the essentials: condition, pricing, terms and profit. Everything else is just a matter of semantics. Professional buyers typically have a team of people that assist in the process as well and have seen a little bit of every type of problem and know how to address it quickly and effectively.
Piled up cars? No problem. Bad Tenants? They’ll evict them. Outdated everything? No worries! Selling your home to a local investor is a simple process when you’re dealing with a professional home buying company.
3) Privacy
Not everyone wants their property displayed through the Multiple Listing Service, major websites and the internet at large that they are selling their home. If you are going through a contentious divorce, have government security clearance, you’re embarrassed about the property’s condition or are simply wanting to avoid dealing with agents and finicky buyers, selling your home to an Investor can be blessing.
What’s best for YOUR situation?
To the other end of these solutions, if you have a well-kept and renovated home, have no real hard deadline that you need to move or capture your equity and want your home displayed to all potential Buyers to get as much exposure as possible, selling to an Investor is probably not the best choice for you.
An experienced investor will have a track record of performance, referrals, a good reputation and be forthright about their intention with the property. You are entitled to do your own due diligence for them as well, as there are those in any type of business who will take advantage of unwitting people, though. If it seems fishy, they won’t give you copies of paperwork, seem unprofessional or shady, then by all means, avoid these scammers and enlist an established, local, professional home-buying company.
So, if you are wanting or needing to get cash fast, sell your home simply and deal directly with the buyer for a quick close, a serious, professional, local Cash investor is wonderful alternative to selling your home the traditional route. If you are proud to list your house to the world, it shows like a magazine spread from HGTV and you have top-notch agents involved, then selling traditional may be better for you.
Which do you prefer? Please leave your thoughts below!
Tracy “Royce of Real Estate” is an investor, agent, rehabber and distressed property expert who buys homes in the greater Phoenix, AZ market. You can learn more at www.RoyceofRealEstate.com (please link to http://www.royceofrealestate.com )
