There are a variety of reasons why a homeowner might choose to sell their home to a real estate investor for cash rather than listing it with a realtor. Typically, the reasons are related to the fact that a home investor can purchase homes very quickly and is usually not concerned about the condition of the home. Some of the reasons someone might choose to sell to a home investor include:
- The owner has inherited the property, and has no need for it.
- The property has not been well maintained, and is in extensive need of repair.
- The owner is facing foreclosure and/or eviction
- The owner is no longer living in the home, and doesn’t have any tenants paying rent
- The property has been on the market for months and hasn’t sold
- The property owner has an urgent need for cash for things like paying down debt, covering college tuition for themselves or a child, or relocating to another city.
Homeowners who are facing one or more of the above situations might benefit from selling to an investor, especially if they are facing several of the problems described. For example, someone who has inherited a property that has not been well maintained and has medical bills to pay would likely be better off selling their home to a real estate investor for cash than trying to list it with a realtor.
In addition to fast closing times (sometimes as little as seven days), owners who sell their homes to an investor for cash will not have to pay any commissions or fees to the investor as they would to a realtor. On the sale of a typical home these commissions and fees can top $10,000.
To find out if selling your home to a real estate investor is the best option, take our quiz.
Who should NOT sell to a home investor?
While there are many benefits to selling your home for cash to a home investor, it isn’t the best option for everyone. Real estate investors are not purchasing property to keep for themselves—they purchase property to re-sell for a profit or to rent out. Because of that, they are not going to pay full retail value for a home—there needs to be enough of a margin for the investor to pay for any repairs that need to be made on the home and still make a profit when the home is re-sold.
If you have a well-maintained home in a good location and have no time pressure to sell the property, then selling to a home investor probably isn’t the best option for you. You should list the home with a realtor or put it up for sale by owner first, and only investigate selling to an investor if the home is on the market for an extended period without any offers.