Wait! Don’t Sell Your Home to an Investor Before You Read This…

If an investor has made you an offer on your home it’s important to know you may be leaving money on the table. 

While their offer is likely tempting, it’s not always your best choice. In fact, without taking the right steps you could be losing a lot of money. 

So before you sign anything, here’s how to ensure you are getting the best offer and the most money for your home. 

Too Good To Be True?

An investor may offer to buy your home without an inspection or repairs, with cash, with all your personal belongings in it, or any number of other options. It can be very enticing, especially for someone who is downsizing or struggling with their home’s upkeep. 

However, it’s important to remember that investors, while an important part of the real estate market, are running a business and they are making a business decision. Whereas you have invested in your home and it can be a highly emotional decision for you. 

Let’s take a look at a real life example: I had a person call saying an investor had offered them $100,000 for their home, as is, with personal belongings still inside. They felt like it was a little low, but considering they were going to leave all of their things behind and not have to worry about repairs they felt like maybe they should take it. They called wanting to find out if we thought it was a good offer.

We looked at it, factoring in all the same option — no repairs, no clean out — and felt like they could definitely get more. So the client decided to list their home. They got three offers quickly. The home ended up selling as-is, with many personal items still in it, for $70,000 more than the investor had offered them!

This is the kind of financial gap that can happen when you sell off-market. 

Click above to hear Seda Real Estate Group’s Becky Seda explain more about selling to an investor.

The Value of Competition

Competition in real estate is a good thing. When you choose to put your home on the market you invite competition. 

You never know what factors there may be that would bring someone to your home. Maybe there’s a neighbor or someone who lives nearby that would like to have a family member move close, maybe there’s a buyer who is motivated to improve a home while they live in it. 

“So, when you put a property on the market, even as-is, we sell as-is properties all the time, you’re going to do better inviting competition than if you just let somebody write you a check,” said Becky Seda, lead agent with Seda Real Estate Group.

You simply don’t know what competition could bring unless you put your home on the market and allow others a chance to make an offer. 

The Thing To Remember About Investors

It’s important to remember that investors are in the business of buying homes. There’s nothing wrong with that; in fact, in many ways they bring value to the real estate market. But it’s important to remember that it is a business.

When an investor makes you an offer they are looking at their bottom line, their profit margin. It’s a black and white business decision for them. They need to buy at a price low enough to cover repairs and other costs, and still sell the house for a profit later. So when you sell to an investor, you’re often selling at a price that doesn’t reflect the true market value of your home. 

Whereas a buyer shopping homes on the market will not be factoring in that profit margin, which is why they are often willing to pay more than the investor. 

“Do not leave your hard-earned equity on the table and hand it to an investor unknowingly. Just do your research,” said Seda.

There are definitely cases where selling to an investor would be in a homeowner’s best interest. So how do you decide if that’s what’s right for you? 

How to Ensure You’re Getting the Best Offer

If an investor makes an offer on your home, then you need to take a step back and do some research before making a final decision. 

One way to do that is to seek the advice of a trusted real estate agent who knows the market and can give you a fair and accurate price opinion. At Seda Real Estate Group, we are always happy to help you figure out what your home might sell for. You may be surprised and find that your home is worth more than you initially thought. Or it could be that the investor option IS in your best interest. But it doesn’t hurt to have an agent run the numbers to ensure you are getting the most out of your home.

Another option would be to hire a home appraiser. They will be able to evaluate your property and give you a price that it could sell for. This option will cost you money. So make sure you know the cost and take that into consideration. 

Again, we want to stress that there is nothing wrong with selling your home to an investor. If you do your research, weigh your options, and still feel that selling to an investor is the best option then by all means go for it. 

“You, as a homeowner, with the equity that you have in your home, you need to have a choice as to what you are going to do with that,” Seda said. “It is OK to sell, as long as you’re doing it with your eyes wide open.”

Our goal is simply to ensure that you don’t unknowingly hand over the equity that you’ve built throughout the years you’ve lived in your home. If you have questions we are here to help. Give us a call at 405-400-9973.