How Much Will A Real Estate Investor Pay For My House?

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Selling a House to a Real Estate Investor

When the time comes for you to sell your home, one of the options you have as a house seller is selling a house to a real estate investor. There are a number of factors that differentiate a real estate investor from an ordinary home buyer. They are usually more prepared in terms of information and experience, they oftentimes have substantial financial stability and backup, and are perfect partners for a quicker and stress-free sales process.

However, if you’re selling your home for the first time, chances are that you have a lot of unanswered questions and you could benefit from a few tips for first time home sellers. In this article, we’ll explore and answer the question of how much will a real estate investor pay for my house. We’ll look at how much investors pay for houses in general, we’ll share the advantages and disadvantages of working with a real estate investor, and more.

What Do Real Estate Investors Do?

Before we dive into the advantages and disadvantages of working with real estate investors or the process of selling to a property investor, it’s worth answering the question of what do real estate investors do. Most of you have probably already heard of home investors but if you’ve never worked with an investor, there may be a few common misconceptions that you’ve fallen victim to. While a real estate agent is responsible for helping you sell or purchase a property by connecting you to the right seller or buyer, a real estate investor is actually responsible for the purchase of the property. 

Property investors in Knoxville will establish the value of a property from a long-term perspective and calculate the potential returns. Investors in Knoxville can use a range of different real estate investment strategies to both assess and create a plan to work according to when it comes to the property. There are a number of real estate investors in Knoxville that either buy property to let it to tenants or buy to resell for a higher price. 

A real estate investor doesn’t have to rely fully on property investment for their income. This is oftentimes a side business of purchasing, rehabbing, managing, renting out, or reselling the property. 

Pros and Cons of Selling to a Real Estate Investor?

As you can see, selling to a real estate investor sounds like the perfect option if you want to sell your house. To help you make the right decision, we’ll share with you both the positive sides and the drawbacks of selling to a real estate investor. There are a number of factors that must be considered and having all the information about all of them will help you enjoy maximum results. 

Pros of selling to a real estate investor

In a lot of cases, real estate investors are a popular choice for house sellers as they often make cash offers that are very lucrative. But what are the full range of advantages that you can enjoy by working with a real estate investor?

  • Selling your house as-is: The good news about working with a property investor is that you usually don’t have to invest time and money into repairing or renovating the property in order to catch their attention. An investor would have already done their research on the property and its location, will quickly evaluate the condition of the real estate, and decide whether or not it’s worth investing in. In most cases, real estate investors are not looking to buy a house with a plan of living in it. It’s not important to them if the interior or exterior is in good shape, if you’re leaving behind expensive furniture, or if you’ve repainted the walls recently. They can easily fix any existing imperfections and resell for a higher price to new buyers. Selling a house as-is is an easier and much-preferred option by many house sellers. 
  • No reliance on lenders or approvals: Another advantage of working with an investor for the sale of your property is that there is little to no risk of the sale falling because of lack of funds or no mortgage approval. In most cases, property investors will make a cash offer for your house. By working with cash home buyers in Knoxville, you guarantee that the sale will go through and that you will quickly receive the money for your property. However, it’s always advisable to request proof of funds to ensure that you’re working with a legitimate and trustworthy investor. You can do this by asking for a form from the bank or a money market account statement.
  • Less time necessary for the closing phase: Probably one of the most attractive aspects of working with a real estate investor is the fact that the closing of the sale is much quicker. All you need for the sale is an agreement between you as a seller and the investor as a buyer. There are no lenders or banks involved, no property valuation necessary, and no additional documentation and processes. Usually, a cash home sale with an investor takes about two weeks while closing a sale with a buyer relying on a mortgage will take at least a month.
  • More flexibility: By working with an experienced property investor, chances are that you can count on more flexibility to make certain arrangements. For instance, if you need more time to organize your move or if your property is certainly in no good shape, you can always discuss this with the investor and find the most beneficial way out for both sides. 
  • Fewer expenses: Finally, in most cases, a real estate investor will usually take care of the closing costs and back-taxes, meaning that you are not obliged to make any additional payments.

As perfect as this all sounds, there are a few drawbacks that you should also be aware of.

Cons of selling to a real estate investor 

To avoid making a fatal mistake when working with a real estate investor, it’s recommended to be prepared by informing yourself of all the potential risks and negative consequences of working with property investors. 

  • Selling your home for less than its worth: There’s always the risk of making a deal that’s beneficial for the investor but not so great for you. If you sell your house as-is, for instance, chances are that you’ll be selling it for much less than you could sell it for, considering the average house prices in your local area.
  • Entering into a scam: There are a lot of examples where a real estate investor sale actually turns into a horrible scam. If you are speaking with an investor who’s never seen the house but wants to purchase it or you notice some suspicious behavior, make sure to find as much information about the investor as possible to avoid a scam. 
  • Not being aware of who the investor is: This leads us to the next point – awareness. In a lot of cases, you won’t have much information about who the property investor really is. Investors aren’t legally obliged to give out information about who is purchasing the property, which allows them to remain hidden in the shades.
  • A longer closing time when working with foreign investors: Finally, if you’re working with an international investor who is not based in your country, the selling process may take ages because of translation, documentation, and other factors. 

The Process of Selling to a Real Estate Investor

The process of selling to a real estate investor always starts with finding a suitable investor. This can be done by listing your home for sale on popular real estate sites and relying on an investor showing an interest, speaking to a professional company that works with real estate investors, or can connect you to one, and others. Selling to a real estate investor doesn’t involve all the hard work associated with selling to a regular buyer. Sometimes, the investor may only rely on photos and a description to make the purchase. 

The property investor can either be looking for a suitable deal on a property they’re planning to rent out or for a house, they can fix and renovate to sell for a higher price. They will always consider the repair value and the amount of money that they’ll need to fix the house in order to resell for the desired price. Once they’ve gathered the necessary information and made the calculations, investors will make an offer. You can either accept or reject and continue negotiating.

Get a Fair Cash Offer on Your House

What’s most important is to ensure you’re getting a cash offer on your house that is fair. Having a property inspection and valuation is useful in terms of showing you the real value of your property. Cash home buyers have a lot of room for negotiating as they’re offering the full amount in cash, which is difficult to resist. Investors are able to bring down the selling price due to property imperfections or outstanding repairs and other factors. A fair cash deal will help you get the maximum from the sale and will help you cover expenses for your next property or any other plans you may have for the future.

Common Questions About Selling to Real Estate Investors

There are a number of FAQs on real estate investors that we’ll help answer in this article. These include questions about judgment on my house, selling a tenanted property, foreclosure, and more. We’ve already answered the pros and cons of selling your house to an investor, read on for additional answers that will be of use.

FAQs on Real Estate Investors

Will an investor buy my house?

Property investors are always on the lookout for new real estate to invest in. However, that doesn’t guarantee that they’ll buy your house. This will depend on a range of factors and calculations that will show the investor the potential value of the house and what this means for their portfolio.

What if there is a judgement on my house?

There are real estate investors that will avoid buying a house in this situation. In other cases, property investors won’t mind a lien or judgment on the house and will simply consider the costs of the lien, adding it into the price. To see how much an investor is willing to pay for your house in this case, subtract the judgment amount. 

What if my house is in foreclosure? 

Investors are oftentimes the people who help home sellers overcome deadlines to avoid foreclosure from taking place. Property investors are willing to purchase homes that have either gone through foreclosure or are facing foreclosure. In a lot of cases, selling your home to an investor is the best choice if you want to avoid foreclosure.

What if I have tenants in my property?

The answer will depend on the investor and their objectives for the property. A lot of property investors won’t mind buying a property with tenants and allowing them to continue renting the house. However, other investors may be purchasing the home with the aim of reselling, meaning that the new buyer may want to live in the house as opposed to renting it out.

Are there any costs in selling my house to an investor?

Usually, there are no additional costs, commissions, or fees required when selling your home to an investor. However, in the case that you’ve signed a contract with a real estate agent or company, you may be obliged to pay a percentage to the broker. 

Conclusion

Selling your house to a real estate investor is an interesting journey that comes along with a range of benefits and drawbacks. If you’re looking to sell your house as-is, receive a fair cash offer, and enjoy a quick and seamless sale process, selling your property to an investor may be the right answer for you. If you’re interested in learning more about the topic of selling houses to property investors, check out our case study.

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