14 Advantages of Selling Your Home to a Real Estate Investor Versus Through A Realtor
Updated: Jul 18, 2022
Wondering if you should sell your home to a real estate investor versus working with a licensed real estate agent?
Indeed, selling homes through real estate agents is a tried and true approach. There are specific home sale challenges like frustrations with long closing times, offer values, and the traditional real estate process, where selling to a real estate investor can be a quicker, more streamlined, and financially advantageous option.
If you need to get your home sold fast, are facing foreclosure, don’t have the money to upgrade your home for a mortgage-friendly sale, simply can’t afford crippling taxes and expensive maintenance, or just want a stress-free sale, real estate investors can be a one and done solution.
Real Estate Investor versus selling with a realtor ~ What’s the difference?
Real estate investors typically buy property to generate profit. They may choose to “fix and flip” the property for immediate resale or use the property as a cash flowing rental. They often purchase properties with less desirable characteristics like those in need of significant repairs or those in foreclosure.
Realtors, on the other hand, often sell turnkey residential properties to individuals or families as primary residences and aren’t as likely to market “distressed” or fixer-upper properties that won’t qualify for traditional mortgages.
14 Reasons to Consider Selling Your Home to a Real Estate Investor
Selling your property to a real estate investor offers unique advantages versus selling your homes via a traditional MLS listing with a realtor. Let’s review 14 reasons why selling your home to a real estate investor might be the right decision for you.
Because investors tend to be exceptionally financially nimble they can often give you a cash offer within 24-48 hours versus the drawn out month or more needed for a traditional mortgage.
The Ellie Mae Origination Insight Report estimates 49 days as the average closing time on a home purchase. Because investors typically do all cash purchases, closing can be done in as little as a week’s time.
The advantage of closing quickly is that you’ll have immediate cash available to use for pressing financial needs, to reinvest in your next home, and/or avoid foreclosure.
Simple hassle-free transaction
In a typical real estate transaction that involves your realtor, the buyer, and buyer’s agent, there are multiple steps that can prove complicated, time consuming, and problematic prior to closing. Contracts, escrow, loan approval, extensive negotiations, contingencies, and more are just a few factors that can be potential roadblocks to your home sale.
When you sell to an investor, it’s likely the transaction will be simple, fast, and hassle-free as there are no third parties involved or extensive stipulations to satisfy.
All cash offer
Investors generally purchase homes with cash, so you don’t have to go through the headache of waiting on your buyer to obtain financing.
Most retail buyers choose to finance their home purchases, so that means there’s a possibility of the home sale falling through if loans aren’t approved.
When selling to an investor for a cash offer, you’ll have peace of mind you’ll get your home sale proceeds quickly versus waiting for 30-60 days for a traditional home loan to process.
Flexible timeline for life events
Divorce, moving for a new job, the passing of a loved one, or needing to efficiently settle an estate, are just some of the life events that can affect a home sale’s timeline.
In traditional residential home real estate transactions, there’s often little to no flexibility as to when the home sells and how quickly one has to move.
In selling to an investor, there’s often exceptional flexibility as to when the home sale happens, options for your move out date, and in some cases investors will rent the home back to the original seller.
If you need your home sold quickly, investors can accommodate with a quick purchase so you’re free of the financial burden of your existing home and its extensive upkeep.
In the case of an inherited home where the sibling heirs live several states away from the home, it may make sense to sell to an investor that can close quickly. The quick investor sale can be a great solution versus the expense of ongoing monthly upkeep and utilities on the home, possibility of vandalism, paying someone to check on the home, and investing additional money to upgrade the home to make it “MLS-worthy”.
Sell home “as is” with no expensive repairs, renovations, or home preparation needed
Selling a home “as is” to an investor is a great solution for a homeowner that doesn’t want the headache of dealing with the extensive and expensive home preparation, repairs, and renovations, needed to traditionally market the home.
If you’re in a financial bind and can’t afford the needed upgrades and prep work to sell your home, selling to an investor is a great solution.
On average, expect to spend $6,570 for home sale preparation. Expenditures can include but are not limited to carpet cleaning, staging, landscaping, and lawn care, to say nothing of the “time and hassle cost” you’ll incur in sourcing and scheduling the home improvement work.
If your home is in bad shape and needing major repairs, you may find it difficult to get a realtor to list the home without completing the repairs. Investors, on the other hand, are happy to purchase the home “as is” without requiring you to undergo repair bills.
Sell home that can’t be traditionally financed
Numerous traditional financing options like FHA or VA loans have minimum property requirements that must be satisfied to ensure the properties purchased are structurally sound and safe.
In selling to an investor, you’ll enjoy a stress-free sale, as you don’t have to worry about loan funding falling through because your home doesn’t meet lending requirements.
If loan foreclosure is looming, an investor can purchase your home quickly and help you avoid the huge hit to your finances and damage to your credit rating.
With the foreclosure clock ticking, time is of the essence, as in many states there’s just a 90 day window. Listing your home with a realtor may prove difficult due to the short time frame, and there’s no guarantee that the home will sell.
Many investors routinely buy homes heading to foreclosure and will be happy to coordinate a short sale with your lender. The investor mediated sale gives you peace of mind that you don’t have to endure the emotional stress of foreclosure. You’ll also forgo future nightmares a foreclosure can have on your ability to obtain credit, rent a home, or even obtain employment.
Avoid buyer financing issues
If you’re needing to sell your home fast, the last thing you want is to have a sale dead in the real estate water because your prospective buyer couldn’t obtain financing at the 11th hour.
In selling to a cash-on-the-barrel-head investor, you won’t have to wonder “if” the sale is going to happen or stand in the up to 2 month waiting line to get paid while the mortgage office completes its loan approval square dancing.
No commissions paid
In selling to an investor versus through a realtor, you won’t have to dole out commission for your home sale. On average, US realtor commissions range between 5-6%, so you’re looking at $10,000 - $12,000 taken out of your net proceeds on a $200,000 home.
No closing costs
You won’t have to worry about a prospective buyer insisting you pay a portion of your home sale’s closing costs when you sell to an investor. Investors factor in closing costs in the purchase so can take comfort in knowing closing expenses won’t be deducted from your net proceeds.
Sell home in a down market
No matter the state of the home market - hot or not - investors are continually looking to purchase homes. Even if the real estate market is down, investors will still buy and have the luxury to hold until the market heats up again.
No need to list on MLS
Skip the time, hassle, and expense of staging your home, doing repairs, cleaning, organizing, prepping, painting, and landscaping needed to list your home on MLS.
Investors regularly buy homes in their “work clothes”, and are savvy at evaluating property no matter the condition. They’re not going to scold you for not having your home ready to show or burden you with a long “fix it” list contingent on their offer.
Sell home in a bad neighborhood
If your neighborhood has become undesirable due to high crime, proximity to a loud industrial area, noisy neighbors, or some other reason, you can easily sell to an investor that’s willing to buy no matter the neighborhood concerns.
Even for the most resourceful realtors, it can be a struggle to sell a residential home in a problematic neighborhood. Your home may languish on the market for months before a buyer appears. Meanwhile, you’ll be burdened with the uncertainty of not knowing when you’ll be out from under your sinking home ship.
Avoid appraisal concerns and inspection contingencies
With an investor sale, you don’t have to worry if your home will appraise for loan approval or that the inspection will uncover a laundry list of buyer contingencies that will eat away your home’s net profit.
Why selling to a real estate investor can be the right decision for you
Selling your home to a real estate investor can be a great solution for many reasons - avoiding foreclosure, needing to sell quickly, selling a home that can’t get financing, and not being able afford proper repairs and upgrades, just to name a few.
It costs nothing to get a no-obligation purchase price quotation from a real estate investor so don’t miss out on exploring that option for your home sale.
Rising Phoenix Real Estate
We’re a trusted, respected, and experienced real estate investor in the Dallas - Fort Worth and San Antonio area that can help guide you in making the best decision for your home sale.
We will provide you a fair value, fast cash offer for your home in a quick-to-close hassle free transaction that accommodates your needs.
Call us today at 972-544-1862 to get started in selling your home to a real estate investor.