Pros and Cons of Selling Your House to a Real Estate Investor

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Pros and Cons of Selling Your House to a Real Estate Investor

Selling your house on the open market can be a stressful process drawn out over many months and even years. No wonder that so many people consider selling their house to a real estate investor instead. Their offer to purchase your house quickly, pay in cash, and buy it as-is can sound a whole lot better than the headaches that await from selling through a real estate agent.

However, it’s very important to understand the benefits and potential pitfalls that come with selling to a real estate investor, especially if you don’t do your homework. You want to be prepared and understand the transaction just like you would any other. Here are the pros and cons of selling your house to a real estate investor. 

Selling to a Real Estate Investor: Pros and Cons

PRO – Lots of Payment Options

One of the best parts about selling your house to a real estate investor is that they can often offer many different ways of paying for your property. Most often, they offer you a full cash payment for the home, but they can often also offer scheduled cash payments, certified payments, or assumptions of a mortgage or loan, just to mention a few. Depending on the specific situation you’re dealing with, whether it’s relocation, tax liens, or inheritances, they can often provide payment to help with that as well. Every situation is unique but there is a lot of flexibility available. 

PRO – They Buy Houses As-Is

This is a term you’ll hear a lot when it comes to real estate investors. Basically, it means that they will buy your house exactly as it is right now without any need for repairs or satisfaction of outstanding financial concerns. They will buy your house even if it has a lot of issues, such as mold or water damage. You don’t even have to clean up, fix the landscaping, or put a fresh coat of paint on the home. These are the kinds of things you’ll have to pay for and fix before selling on the open market. So if you know that you won’t be able to get your house in the kind of condition needed in order to sell it on the open market, real estate investors like Nexus Homebuyers make life easy.

PRO – No Fee

Since you’re not dealing with a real estate agent, appraisers, inspectors, or other parties that you would in a market sale, you don’t have to worry about all the fees that tend to pile up when selling your house. You’ll get an offer from the real estate investor and if you agree, then that’s it. They will often pay for any closing costs as well, which cuts down your financial responsibility greatly. Because they make their money after they repair the home and sell it for profit, they’re not concerned with nickel and diming you. 

PRO – Fast Transactions

Each real estate investor is different but many of them can make reasonable offers on your property within a few days. Because they are not beholden to financing, appraisals, or inspections, they can make their own business decisions and deal with you directly in a very short amount of time. In Nexus Homebuyers’ case, we strive to make a fair and accurate offer within 24 hours of contact on business days. We know that you might need to make a sale as soon as possible and want to serve that need. 

PRO – You Don’t Have to Move Right Away

Usually, when you sell a house on the market, you have to vacate once the closing day comes and you sign over ownership. With real estate investors, you can negotiate a move-out date that works for you before you sell. Since you don’t have to prepare the house to look a certain way, you can focus on taking your time to pack and get your next steps ready. You can also negotiate a lease-back agreement with the real estate investor, which allows you to keep the equity you need for the next steps before you move out. 

Pros and Cons of Selling Your House to a Real Estate Investor CON - Selling Your House Below Market Value

CON – Selling Your House Below Market Value

The trade-off for selling your house to an investor instead of a traditional buyer is that you’re probably not going to get the market value or windfall that you might have. Real estate investors make their profits by fixing up and reselling homes, so they are going to make a fair offer but it will likely be below market value so that they can make money themselves. However, it’s often the case that someone selling their house to a real estate investor goes into the transaction valuing speed or lack of expense over profit, so it’s not a case of sticker shock. Make sure the real estate investor you work with understands that there’s a balance between fast and fair. 

CON – Beware of Scams

Unfortunately, there are lots of people out there who see the real estate investing model as a way to trick desperate homeowners out of their property or try to strongarm them into lowball offers. Your best defense against this is to do your research. Get names, addresses, company history, and any other information you can double-check. Ask the investor for references, including previous customers. Take a look at their profile with the Better Business Bureau in order to find out any complaints. Basically, if they can’t back up their claims or legitimacy, you probably shouldn’t work with them. 

CON – Investors Don’t Need Licenses

Since a real estate investor isn’t representing a buyer or seller the way that an agent or Realtor would, they aren’t required to have a real estate license. That means that they might not be accountable to certain regulations that keep other real estate transactions in line with the laws. All of which comes back to you doing your due diligence and making sure you understand who you are working with and that they have a proven track record of integrity and respect for the homeowners they work with

Selling your house can be a painstaking or awful experience, but by working with a reputable real estate investor like Nexus Homebuyers, you can eliminate all of that stress, get a cash payment, and be done with the entire transaction in a matter of days.

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