In the current crazy real estate market, there are many investors buying available inventory and sellers may get offers from both residential buyers and those looking for investment properties. So, it is wise to know some of the pros and cons of each.
A major difference is that a family or couple is buying the home to move into as their residence. An investor is looking to make money, either by renting or flipping the house shortly after the purchase. Many Wall-Street backed institutions are investing in properties and even buying entire neighborhoods around the country.
There are some positives to selling to an investor: There are no concerns about financing delays. The majority of homebuyers finance the purchase and this takes an average of 45 days to close if all goes smoothly. A real estate investor is likely to pay cash offering a quick closing and willing to buy the home as-is. They will also eliminate the need for open houses or any staging.
The biggest negative is the potential to get less money than if the home was on the open market, perhaps getting multiple offers. The key driver for an investor is profitability. When homebuyers find a property they love, they may be willing to pay more due to an emotional connection based on design or location.
When making a decision whether or not to sell to an investor, consider the following questions:
- Do you need to sell the home quickly?
- Is your home in good condition?
- Does it need any major repairs?
- Do you have cash on hand to do repairs?
There is no correct answer. It all depends on the individual situation and what is right for the seller.
This information courtesy of an article by Ashley Sutphin