Selling Your Home to an Investor a Bad or Good Idea
We Buy Houses Posted on December 4, 2019 Posted by Will
If you're thinking about selling your home then you've definitely started to notice those signs along the road that read "We Buy Houses Fast Killeen!!" As a prudent person, you're weighing your options about how to sell your home - should I list it with a realtor, should I try the "For Sale by Owner" route, or should I sell my home to a real estate investor? Indeed, all great questions but in this article, we specifically discuss the:
Pros and Cons of Selling Your Home in Bell County to Real Estate Investors
The real estate market has experienced noticeable change throughout this decade and it's becoming more and more common for home sellers to encounter real estate investors in Bell County. But, if you're like most, this will likely be your first experience dealing with investors and you're a little weary of this seemingly new and somewhat odd way of selling your home. Here's what you should be on the lookout for:
Cons of Selling to Real Estate Investors
- Magic Investors. Buying and selling real estate requires no exams, no licenses or degrees, nor any continuing ed hours. Anyone can wake up and say - "I'm gonna be a real estate investor" and voila - they're an investor. These "investors" (emphasis on quotation marks) put sellers at risk in one very notable way - wasting your valuable time. They often do not have the knowledge nor experience needed to close on real estate deals, especially when there's tax liens, probate orders, and/or heirship issues that must be addressed with the title company. Moreover, these newbies often have no funding nor the business connections needed to get rapid funding.
Tips to Avoid Magic Investors: Find out what type of investor you're dealing with. Are they going to buy-and-hold, rehab and flip, or are they a wholesaler? If dealing with the first two, you're likely then dealing with the actual end buyer. Alternatively, a wholesaler is going to get your home under contract and then sell the rights to your home (i.e. the contract) to another buyer. Wholesalers are NOT the worst thing in the world and they may be right for your situation but the PRO-TIP is: verify that they can deliver on their promises. To ensure you're dealing with an experienced investor, ask for a list of deals they've previously closed on (e.g. HUD 1 statements) or for proof of funds.
- Sam the Scam. As with just about any financial transaction, there's risk of fraud. How do you avoid this?
Tips to Avoid Sam the Scam: Start by looking for the investor's website. Do they even have one? What information is on there? Is it helpful or is it irrelevant? Does it give information about the pros and cons of selling your home in Bell County to a real estate investor or is it one sided? Do you find testimonials or evidence to substantiate they're experienced real estate investors? PRO-TIP: call their office - is the person helpful and respectful of your time? Does he sound knowledgeable? Ask about their process and how they will work with you. This alone, will tell you all you need to know about the company's legitimacy. Finally, ensure that you never give money to an investor until the day of closing. If for some reason money is needed up-front, deposit those funds with the title company's escrow agent.
- Lowly Loins. Investors have their own costs to contend with and barring some unique circumstance, you can be confident that most of those costs will be accounted for in their all-cash offer for your home. Moreover, Killeen real estate investors are aware of the fact that they're taking a sizable risk when agreeing to be on the buying end of someone selling a home as-is in Bell County. As such, it is unlikely that an investor will pay market value for a home in its peak condition. Certainly important to note, however, according to Zillow sellers incur an average of $13,357 in hidden costs when selling their home traditionally. This is for things like staging, making repairs, and closing fees.
Tips to Avoid Lowly Loins: You could request an appraisal to substantiate their offer or ask for some sort of a concession to offset the discounted price like the ability to remain in the home for a period of time after closing or the investor paying for your moving service. PRO-TIP: Some Temple real estate investors can actually pay more than market value because of the type of investor they are or the availability of non-traditional finance options. Your Bell County real estate investment company FixerUpper4Cash is one of those investors!
Pros of Selling to Real Estate Investors
Now you have the knowledge and "ammunition" to protect yourself against the cons, but what about the "p" in the pros and cons of selling your home in Bell County to a real estate investor?
- Happens in a New York Minute. Traditional sales can drag-on-and-on with costly buyer repair addendum's, buyer bank approvals, certified inspections, and appraisals. In a traditional sale, the best-case scenario is 40-days for the deal to close and for you get your money. Most take longer according to an Oct 2019 realtor.com report the average now exceeds 50-days and that is if the deal doesn't fall thru at the last second. It's happened to us folks.
Fast Closing Made Possible: Assuming a property's title is clean, Bell County real estate investors like FixerUpper4Cash can close in as little as 7-days. This is because we're fully funded, we buy houses all-cash, and therefore don't need bank financing. We likewise don't require appraisals or certified home inspections. PRO-TIP: If a property's title is NOT clean (e.g. tax liens owed to multiple payees, probate orders, heirship issues); FixerUpper4Cash will perform the arduous task of "cleaning-up" the property's title. We've helped many folks in this way and have evolved into experts at getting the job done efficiently.
- No DIY Network Stuff Necessary: What we mean is this - investors will buy your house As-Is and often times, house unseen. That means no listings, no showings, no keeping it clean, no parade of strangers in your home, but most importantly, no costly repairs.
No Repairs Made Possible: Think back to cons part #1 of the pros and cons of selling your home in Bell County to real estate investors...and don't yourself try to become a "Magic Investor"...leave it to the experienced experts which you can verify their legitimacy by following the recommendations of cons part #2. The potential concern here is cons part #3 - investors will often account for the cost of repairs in their offer. This may seem unfair until you realize and accept this simple fact - "investors are financing and doing all the repairs, not you. Investors are agreeing to take on the risk of paying for things like property insurance, property taxes, loan interest, utilities, city permits, contractor fees and building materials, and on-and-on...NOT you". PRO-TIP: Ask the investor to share with you their comps of the properties they're saying your home will be worth once it's all fixed-up. Have them explain how they came up with their numbers and the profit they expect to make. As a last resort, you could request what's called an "equity partner" deal. What is that you ask? Imagine your Sally the seller and Bob is the Investor.
Sally: "My house all fixed up is worth $100,000." Bob: "I believe it'll be worth $96,000 max". Sally: "I just don't think you're right." Bob: "Tell you what, we'll fix up the home and resell it. If we sell it for more than $100,000 then we'll split all profit 50/50 over that, deal at $96,000 ma'am?" Sally: "I like that idea, ok Bob, deal." There you go, equity partner explained.
- KISS: That's the acronym for Keep It Simple Silly. Real estate investors like FixerUpper4Cash absolutely do KISS when they pay all-cash for houses in Belton. This eliminates the need for banks and other third parties. Additionally, investors will typically pay all closing costs meaning you can sleep easy knowing that you won't have to bring your own money to the closing table.
Your Kiss Made Possible: Experienced investors have established relationships with land attorneys, title companies, and escrow agents. Those established relationships benefit sellers because investors are intimately familiar with the real estate buy/sell process and they know how to get the deal done to your satisfaction and on your schedule. PRO-TIP: Be available to provide basic info to investors but when it comes time to start chasing down people and loan documents all over the world, let the investor do all the hard work.
- World Record Holders of Flexibility: Real estate investors in Bell County have the luxury of both time and numerous payment options. Regarding time, when selling the traditional way, both parties have to agree upon a closing date, though usually the buyer is in charge. That means sellers have to be out of the house on the closing date - no ifs, and, or buts. In nearly any instance, investors couldn't care less when the deal closes, if you need more time, no problem - the bottom line is - the closing date is up to the seller. Another of the pros and not the cons of selling your home in Bell County to real estate investors is that they often don't care how they pay you. FixerUpper4Cash buys houses all-cash, on-terms, or even subject to the existing mortgage.
Flexibility Made Possible: You, as the seller, are in control of when the deal actually closes and thus you are in control of when you move out. You are also in control of how you get paid, perhaps you owe more than the house is worth but some real estate investors have an investment approach which allow you to get out of the house scott-free; sometimes even with a couple thousand dollars in your pocket. PRO-TIP: Real estate investors often don't care if you leave stuff behind in the home, which isn't an option in a traditional sale. Additionally, it might be nice to get payments long-term that are more than your existing mortgage payment.
As you've read anyone can be a Magic Investor, Sam the Scam, or give low-ball, uninformed offers. As such, it pays to do your homework so congrats on doing yours (you made it to the end of this blog!). You can find top-notch companies who will openly and candidly explain the pros and cons of selling your home in Bell County to real estate investors. These investors have your best interest at heart and will work hard to help you because they operate under the absolute life maxim "put good out into the world, and good will be returned to".
Please consider FixerUpper4Cash home buyers in Temple, Belton, Killeen, and Harker Heights. We invite you to click around our site to learn more about us then give us a call for a fast no obligation offer on your home. You'll find polite, helpful friends in us and you'll see that we honor our company's guarantee: respect and treat our sellers as if we were buying our own mother's house!
Contact us today!