Before You Sell: What to Know About Real Estate Investors

In today’s booming economy, we have countless investment options.  Some people choose to invest in the stock market and take out shares in the hopes of seeing a return. Others invest in real estate, spanning market properties such as single-family homes, condos, townhomes, duplexes, and multi-family dwellings. While you may not know a lot about real estate investors, it’s essential to decide whether selling to an investor is the best choice for you. Here are some things to take into account about real estate investors when you’re looking through an investor’s offer.

There are three types of residential real estate investors:

• Wholesalers
• Short-term investors or flippers
• Long-term investors.

Wholesalers negotiate to bring a property under contract and will shop the property around to other investors. They usually will assign it to another investor, who will complete the transaction.

Short-term investors or Flippers are similar to the home improvement shows you may have seen, where the short-term investors will buy a property (usually what they deem as a fixer-upper), make valuable improvements, and needed repairs. Then they will sell the property to another buyer. Short-term investors typically have a property anywhere from a month to six months.

Long-term investors intend to buy a property to live in it or eventually rent it out as the home appreciates and builds equity. Long-term investors seek homes with affordable mortgages and marketable

Selling to a real estate investor comes with various benefits:

• A Faster Timeline: Real estate investors will meet your closing timeline needs. They are motivated to close fast, as they face penalties in carrying costs the longer it takes them to close. While this can be problematic, there is less red tape than with a traditional sale.
• Fewer Repairs and Negotiations Needed: Particularly with short-term investors/flippers, with minimal negotiations, home inspection, or appraisal process, you can sell your home as-is without negotiation for needed repairs or costly maintenance.
• More straightforward Financing/Cash Purchases: Many houses on the market today are going to those who pay cash. Not every real estate investor will make a cash offer, but the majority of them do. Taking this less conventional method means more reliability in your funding and less concern about the investor’s financing not falling through.
• Rental Options: When the pandemic hit, most Americans faced financial hardship and had difficulty meeting their monthly rent and mortgage payments. If one of the reasons you intend to sell your property is financially motivated, selling your home to an investor may allow you to continue living in your home and pay the rent if they are willing to work with you.
• Investors are more active than homebuyers: The real estate market is currently a seller’s market. With less supply and more demand, prospective homebuyers are losing bidding wars are turning away from potential homes for sale because the prices are too high or there is not enough inventory. On the other hand, investors are looking to add at least one property to their portfolio each year. Some investors will also give you a commission if you can find potential rental properties for them.
• Less Traditional Sales Process: Without the process of a home inspection and appraisal, legal negotiations, and ensuring the transaction is put through all the proper channels, selling to a real estate investor will give you a quicker, more streamlined process geared toward the standalone sale. If your goal is a more effortless transaction over getting the maximum net worth from the sale of your property, selling to a real estate investor might be for you.

Whatever your situation, it’s crucial to look at all available options before selling your home and weigh which option is the best for you in the long run. Real estate agents will handle the transaction for you from start to finish, and by having an appraisal and home inspection, you can rest assured that you will net the maximum worth of your home while having financial and legal failsafe in place. As REALTORS®, we have an ethical obligation to adhere to the highest ethical standards and practices. But if you want to sell your home as quickly as possible without the traditional inspections and delays, and you aren’t concerned about how much it will sell for, selling to a real estate investor may be a good solution for you.

If you have any questions you’d like to ask about what’s the right option for you, we know the real estate business inside and out, and we would love to speak with you. At Inman Torres and Company, we work hard to help clients find the right home at the right price. With access to comprehensive reports and in-depth knowledge of current market conditions, we can also give you a free, no-obligation estimate of what your home is worth. Contact us today to see how we can help you buy or sell your home.