Should I Sell to a Home Investor

    Should I Sell To A Home Investor?

    Your vacant home in the suburbs has been approached by a home investor. This is the opportunity you had been waiting for. However, before you decide to go all in, you need to know who exactly it is that you are selling to.

    Home investors are probably not the first people that come to mind when you want to put your house on the market. Estate agencies and listings are the natural places where anyone would market their house and eventually sell it from. Traditional routes to sell a house as is tulsa are more suitable, more sophisticated and properly channeled. On the other hand home investors are a new phenomenon starting as far back as the early 2010s. Home investors purchase properties with the intention of refurbishing and selling at a profit. These professionals can be individuals or a home investor company whose sole purpose is to purchase property as an investment strategy.

    Now that you have the basic about them clear, is there any benefit in selling to them?

    Contents hide
    1 Benefits of Selling Home Investors
    1.1 They pay in cash only
    1.2 No repairs are required; sell as is
    1.3 Zero Commission costs to you
    1.4 Sell your house quickly
    1.5 The Market doesn’t matter to them
    2 How can I sell my house through a Home Investor?
    2.1 1. Signing the Contract
    2.2 2. Verifying funds exist
    2.3 3. Get an Escrow Company
    2.4 4. Get a Title Company
    2.5 5. Get your home inspected
    2.6 6. Close the Deal
    3 Are Home Investors Legit?
    3.1 Expert FAQs
    3.1.1 1. How much will an investor pay for my house?
    3.1.2 2. Is there any downside of selling to Home investors?
    3.1.3 3. How do I find a home Investor for my house?

    Benefits of Selling Home Investors

    1. They pay in cash only

    This may seem like the obvious first benefit. Selling a home to an investor means getting quick cash. Once you sign the papers, you will receive a check that you can deposit directly into your bank account and withdraw later. You will not have to wait several months for the bank to come through with the finances, neither will you have to wait for the approval from the buyer or fear that the buyer may back out last minute. Unlike a traditional sale where you have to wait for multiple approvals before you can see any kind of money, which can again come in installments, home investors pay in full cash when the deal goes through.

    1. No repairs are required; sell as is

    Traditional routes to selling a house require you to make repairs to make it look appealing to the buyers. While the process of remodelling does increase the price points, many people do not have the funds for remodelling. Secondly, your sale price may not recover the cost of remodeling which may become substantial. A home investor buys property as is which means you can proceed to sell your house even with a caved in roof or a shaky foundation. Furthermore, you don’t have to pay for inspections or clear any loans or liens or legal encumbrances. A home investor company will buy your space and clear all the legalities for you.

    1. Zero Commission costs to you

    Traditional selling routes necessitate hiring an agent who charges a fee for their services in the form of commission. Home investors are interested in purchasing the property as soon as possible and do not include a service fee in their contracts. This also means that the amount paid to you in cash is the full cash value of your property and is not a deducted value.

    1. Sell your house quickly

    Traditional routes take anywhere from 60 days to a year to sell your house. Selling and buying through agents open up financing routes through banks which can take months to materialize. But home investors have the money to make the transaction themselves and only require your presence and a home. The fact that there is no middle man, no commission and no need for inspection culminates into time saved and a quick sell with guaranteed money. The best home investor companies can close a deal in as little as a week and as long as two weeks.

    1. The Market doesn’t matter to them

    For traditional house sellers and buyers the locality is of the utmost importance, largely because the buyer is looking to settle in the locality or, even from an investment point of view, looking to rent it to someone who might live in it. For home investors, the emotional element and attachment is not present. They do not care if the house is in a bad neighborhood or a good one. The idea is to buy the house and sell it for a profit. Home investors will invest in all kinds of neighborhoods and markets to make a profit.

    How can I sell my house through a Home Investor?

    There are many reasons you may quickly want to sell your property for cash. You maybe behind in your payments, had a divorce and need to move ahead, have a house that is in dire need or repairs or have to relocate because of a new opportunity. Nevertheless, the process of selling your house for an all-cash offer is easy and very straight-forward.

    1. Signing the Contract

    After getting in touch with a home investor of your choice and setting a mutually decided price you can move ahead and sign the Contract. Get a Purchase and Sale Agreement completed and sign it to start the process of selling your house.

    2. Verifying funds exist

    This is an important step. You do not want to be scammed into thinking you will be paid a handsome sum of money while there may be no money coming in. The best way is to ask for ‘earnest money’ which makes up about two percent of the purchase value and a bank statement or some other proof from the buyer. Another way is to involve a real estate agent who can facilitate this part and make sure the sale is secure.

    3. Get an Escrow Company

    An escrow company manages the transfer of funds from the buyer to the seller upon the closing of the sale. They hold the funds until all the conditions of the closing are met. This keeps the funds secure and makes sure all the legal paperwork is completed and the funds are transferred safely. Make sure you or the home investor company hire this professional as they play a very critical role in completing the sale.

    4. Get a Title Company

    A title company ensures that title of the property actually changes in the name of the buyer, rechecks the property lines and checks if there are any outstanding liens or debts on the part of the seller in connection with the property being sold. This professional plays a critical role during the transfer of property. Make sure they are hired by you or the buyer to complete the sale process effectively. Note that you can hire one company to complete both title and escrow processes.

    5. Get your home inspected

    Many buyers add an inspection contingency to the sales offer. This inspection is different from the inspection that traditional home selling routes require and is not as strict. However, as per the contingency, if a potential issue is brought to the notice of the home investor, the agreed-upon price is subject to renegotiation.

    Once these negotiations are complete and the property is set up to sell, the deal is ready to be closed.

    6. Close the Deal

    There is a fair amount of paperwork that you need to review and sign:

    • Final Closing Instructions: These can be signed when you open the escrow account. If you didn’t sign them then, you will sign them now. This document has details about the tasks your escrow company will be undertaking for you.
    • Statement of Information: This is a document about you and who you are claiming to be.
    • HUD-1 settlement statement: This document has all the details about the sale down to the last cent. Have someone recheck this document for you and keep this safe.
    • Title Deed: This deed will officially transfer ownership and will be made out in the name of the buyer.
    • Statement of Closing Cost: This document is your approval of the closing costs and the fact that you know them and agree to them.
    • Mechanics Lien: Once you sign this you declare you have no liens on your property
    • Bill of Sale: Any additional stuff that you would be leaving behind would be added in this document. For example, if you are selling a furnished house, all the furnishing will be added in this document.
    • Certificate of title: This certificate gives you the authority to sell your property.

    Once all these documents are signed and funds transferred, the deal is said to be closed.

    Are Home Investors Legit?

    Yes. Most home investor companies are legit. They will provide you with a wonderful all-cash buying experience and do good on their word. But scams are also rampant. One way to check for the legitimacy of a company’s claim is to check their BBB (Better Business Bureau) rating. Check for the complaints and reviews. Furthermore, you can ask for proof of funds when dealing with them. Asking them for earnest money is one way to gauge their interest to buy. If this is not something you want to do, hire a real estate agent who can help you figure out the mechanics of the cash buyer market. They usually know who is legit and who is scamming people.

    Expert FAQs

    So now that we have the basics of selling a house to home investors sorted out, let’s get some expert FAQs and sort some tough questions.

    1. How much will an investor pay for my house?

    This depends on a number of factors. Investors buy house to sell for a profit and they are looking to buy at a margin where they can make a profit. Typically they pay anywhere between 50% to 85% of the market value of your house. The industry average is around 65%. Most of the houses investors buy are either in bad shape or things you can’t afford to keep for one reason or another.

    2. Is there any downside of selling to Home investors?

    Home investors do not need a license to buy houses. Not just yet according to the prevailing law. This means anyone posing as a home investor could show interest in your property and rip you off. Scam artists are many and abundant in any trade.

    3. How do I find a home Investor for my house?

    The best way is to respond to “We Buy Houses” ads in your neighborhood. You can also identify houses in your area that were flipped and contact the owners. Posting online on social forums where real estate investors congregate is another way of connecting with a potential home investor for your property.

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    Comments

    1. reply
      Elizabeth June 4, 2022 at 3:25 am

      When you sell your home to an investor, you’ll get a quick, cash offer without having to go through the typical process.

    2. reply
      Steven Smith July 9, 2022 at 2:27 pm

      Be aware of scammers posing as foreign cash buyers.

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