Should You Sell Your Home to a Home Investor?

Should you sell your home to a home investor? It depends on your situation. Factors such as how quickly you need to move and the home’s condition are common reasons to choose a home investor.

Selling your house to a home investor means you aren’t working with a real estate agent. It also means not listing the house on the MLS, the database of properties for sale that real estate brokers rely on.

Selling to a home investor is like selling a car on your own. You can list it on car websites and price it based on similar makes and models. But if your car needs repairs, even minor ones, you probably need to reduce the price. At this point, you could pay to repair it and then try to sell it. Or you could go straight to a dealership and let them deal with the repairs and the sale. Selling a car as is to a dealer is the equivalent of selling a house as is to an investor. However, when you sell on Sundae’s marketplace, our network of vetted investors compete to buy your home so you’re still getting the best price possible.

Common reasons to sell to an investor

These are several common reasons for sellers to consider selling to a home investor. Here are a few for you to consider:

Inheritance: You inherited the house from a family member or death in the family and you don’t want to deal with it being vacant. A house that sits empty for too long will require paying capital gains taxes once it sells.

Foreclosure: If you’re in dire financial need and facing foreclosure, you may need to sell quickly.

House needs major repairs: Your house may be extremely outdated or needs repairs that are too costly to make.

Need to move quickly: If you need flexibility on your moving timeline, investors tend to be willing to negotiate a short or long closing process.

Life circumstances: Perhaps you need to relocate for health, work, divorce, or a birth or death in the family.

If you’re on the fence about whether you should go this route, there are a few considerations to think about to help you make an informed decision.

What is a home investor?

A home investor is an individual, group of people, or company in the business of buying and selling homes to make money. They buy residential properties as part of their business and have the funds and means to buy homes entirely in cash. They usually rent or flip the homes quickly and sometimes buy homes in bulk.

Because this is a part of their business, negotiations in the selling and buying process will go differently. There are definitely pros and cons to going this route. It depends on your personal situation and what your timeline to sell looks like.

If your house is in disrepair and needs tens of thousands of dollars of work, you may not want or be able to handle that expense. Motivated sellers often turn to an investor to help offload their home quickly.

Read more: What You Need To Know About Cash Homebuyers

iBuyers vs Home investor: What’s the difference?

You may have heard of an iBuyer, which is a kind of house-buying company. iBuyers use technology and data to help streamline the process.

iBuyers aim to make competitive offers for sellers who don’t have time, money, or energy to deal with home repairs before moving.

Sundae shares some traits of an iBuyer, but is slightly different. The main difference is the fees. iBuyer fees may cost around 15% of the home price when all is said and done. Sundae doesn’t charge fees to work with sellers. A Market Expert from Sundae goes directly to the seller and explains the process of selling on our marketplace.

There are many factors involved with the buying and selling process, so the market expert answers questions for the seller and makes sure they understand the process and selling transaction. We’re also different in that Sundae is a marketplace. We advertise your house to our pool of investors who compete to buy your home.

Should you sell to an investor? Reasons why you’d do it

If time and money are tight, you might benefit from selling a house to an investor.

If you were to traditionally list your home on the market, you’d have to prepare it for buyers. This may include:

• Cleaning and decluttering
• Painting
• Lawn care and gardening
• Taking professional photos
• Staging with furniture
• Scheduling open houses (and having to leave while the home is being looked at from buyers if you’re still living in the house)
• Dealing with realtors

This could cost thousands.

Investors could be an easier route because they care more about the financials and less about the cosmetic issues of your home. This is because they may end up renovating and selling the home after the purchase is made.

Because many investors pay for properties in cash, the time to close on your home may be quicker—the average time it takes to close is about two weeks. All you have to do is agree upon the conditions of the sale.

With a traditional sale where the buyer needs to take out a mortgage, it may take a minimum of 45-60 days.

Reasons why you wouldn’t sell to an investor

Unlike selling your home the traditional way, you may not get top dollar selling to an investor, especially if your home needs major repairs. The price an investor gives you takes into account the costs to get the house ready for resale.

The investor may still give you a fair market value, but if you’re selling your home as-is, you won’t need to pay for renovations before selling.

Selling to an investor means you may not know what’s going to happen to the home after you sell. The buyer could be a developer who demolishes the home to make room for a whole new property or turn it into apartments.

If you have sentimental feelings towards your home — perhaps it was in your family for generations — you may want to know what’s going to happen to it after you sell. Selling to a family and knowing the home will be around could be an important reason to avoid investors.

Investors don’t technically require any kind of credentials to purchase property from sellers. That means they don’t need to be licensed. Be ready to do your research if you’re considering an investor and make sure they are the real deal.

Selling on Sundae’s marketplace

There are many options when it comes to selling your house.

Selling to an investor requires research and conversations with professionals. Make sure you understand all of the pros and cons before deciding whether it makes sense to sell to an investor. If you aren’t sure, Sundae can help.

Our mission is to help homeowners get the best outcome when selling a house that needs some love. That means that, even if you don’t sell your house with Sundae, our Market Experts will be happy to help you understand your options.

We make the process as simple as possible. We do all the work and help you sell your home as-is to our network of investors who compete to buy your home. We handle all communication with our investors so you interact only with Sundae throughout the process. And remember, the only favorite we have is you. We are incentivized to get you the highest possible offer and help you sell quickly.

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