Selling Your Home to a Real Estate Investor: Questions Answered

  • February 3, 2020
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How many times have you seen signs in your neighborhood that state something along the lines of “We Buy Homes? They are signs that investors put up in hopes of attracting people looking to sell their home quickly and to get a fair cash offer on their home. Many people find that these signs are loud and obnoxious and it can turn people off to the idea of whether they should sell to a real estate investor or not. Here we’ll explain what a real estate investor is, how they work, and why you may want to consider selling your home to a real estate investor when you move.

What is a real estate investor?

According to Wikipedia, a real estate investor is someone who actively or passively invests in real estate. The investors in this case, that are making cash offers on homes are considered active investors and may buy a property, make repairs, improvements or otherwise add value to the property by doing things like rezoning or subdividing, with the ultimate goal of selling it later for a profit or keeping the property as a rental.

These active investors create a solution for people who choose to forgo the traditional route of selling a home for various reasons, including:

  • Want to sell a home as is
  • Avoiding foreclosure
  • Receiving an unwanted home as an inheritance
  • Relocating to a new area
  • Paying off debt or liens
  • Tired of having a second home
  • Divorce

Why do real estate investors offer cash for homes?

One of the things that set an investor apart from a traditional buyer is that the investor will offer cash. Additionally, since there is no bank involved, there are no mortgage contingencies and no inspection contingencies which are common reasons for a home purchase to fall through after being in contract for a few months. By making a cash offer, there is no waiting on offers and financing to come through like you would with a real estate agent, which can take months. We look at your home, value this minus the repairs, and prepare an offer.

Since real estate investors buy homes as-is, sometimes the homes we purchase do not qualify for financing due to the condition they are in. This can be for reasons including being condemned, having unpermitted work that was done on the property, or properties that are otherwise uninhabitable due to lack of heating for example. This leaves cash buyers are your only option to sell these types of properties.

How do you sell to an investor?

First off, don’t trust all those signs that you see around your area! These may not belong to true, experienced investors. Many beginners pay to attend local real estate trainings, are excited to start getting involved in real estate, and put up these signs as a cheap way to start getting some calls – but they don’t have any real experience under their belt. Instead, do your research and find someone that has a proven track record for being fair and honest when it comes to buying homes and has the experience of purchasing many homes in your area.

At Leave The Key Homebuyers, we start the process by learning about your situation – why you are looking to sell, what you are looking to do next, etc. During an initial phone conversation, we’ll also ask about the condition of the property to evaluate whether we may be a good fit.  We’ll schedule a time to meet you and tour the property. Then, using what we know about your goals for the sale of the home, we’ll structure an offer for you that will be tailors to your specific situation and objectives. It’s then completely up to you as to whether you want to accept our offer – no obligation, no pressure.

Agreeing to sell your home to a real estate investor

How do I choose the best investor to work with?

The sale of your home is one of the largest transactions you perform in your lifetime and you want to make sure you are working with honest and experienced people that will help you navigate the process. In order to identify the best investors to work with:

  1. Be sure to do your research on the investor that you are working with to make sure that they are trustworthy and experienced – ask for references or testimonials.
  2. Be sure to check for any hidden fees that may be there. You do not want to lose a ton of money on fees that you were unaware of, after all, high fees are likely one of the reasons you chose to forego a real estate agent in the first place.
  3. Understand the real estate investor’s home buying process.
  4. Ask questions of the real estate investor if you are confused, they should be happy to answer anything that you may ask and act as a consultant to you during the home selling process.

What you should keep in mind when selling to a real estate investor

  • This is going to be a cash deal, so don’t expect to get the full asking price of the home. When you are selling to a real estate investor you are getting the cash fast, and they are going to be giving you a discounted rate. Keep in mind that they are taking on the home as-is, complete with the repairs that may need to be made, and the risks associated with owning the property in order to make any type of profit.
  • Investors are simplifying the process of selling a home, and you are going to find that this will go quickly when compared to the traditional sales process. When you are faced with a tough market, where homes are sitting on the market for months on end, then an investor may be one of the best options for you.
  • The location of your home is going to affect how much you are offered. If an investor knows that the area is up and coming or that it is one that is highly desired, then they can offer more cash for the home. They are going to be able to move this house faster when the area is one that is desirable.

When Do You Get Paid?

One of the biggest reasons that people work with a real estate investor is because they know that they are going to get paid for this home sooner than if they went the traditional route. However, those who are not familiar with this type of transaction often wonder when they will get paid. To understand this, you have to know the entire process that goes into selling your home to a real estate investor.

At the closing, there is a settlement statement that is also called a HUD-1. This statement has all the charges and credits that are associated with this transaction. The buyer’s attorney holds the real estate investor’s money in escrow prior to the closing and during the closing process, the funds are released to the mortgage company to pay off the debt on the house and delivered to the owner via wire transfer or certified check for any amount that exceeds what was owed on the property.

Why Choose Leave The Key Homebuyers?

There are several benefits to working with Leave The Key Homebuyers. For example:

  • Our process is quick compared to traditional methods of selling your home
  • You can sell this as is with no need to invest more into your home
  • We offer cash…you can have cash in hand at the closing
  • We will arm you with knowledge of what you are doing versus what you could do so that you are making an informed decision with all your options available

For those who wonder if this is an option for them, remember that almost all homes qualify for us. We take homes in various conditions and in various situations. For example, we can buy homes that need repairs, homes that were inherited as part of an estate, homes that may have a lien or taxes owed on them, homes where you may owe more than it’s worth, and many other situations.

We can close on your home in a fraction of the time it will take for a traditional sale. We want to make the transition out of your home as easy as possible. If you want to leave items behind, we will deal with them by donating to local charities or disposing of them for you. Just Leave The Key to us, and we’ll take it from there so you can move on.

Are you thinking that a real estate investor is the best option for your home? Be sure to contact us today. We can offer a cash offer once we see the home and you can decide if this is the route to go or not.

Guide For Selling Your Home to a Real Estate Investor