43. Selling your house to an investor | Pros and Cons

We buy properties in Houston TX

We buy houses in Houston TX. Maybe you’re wondering,What are the pros and cons when I sell my house in Houston TX to an investor? Well, as homebuyers in Houston, Texas, there are things to consider when selling your property to an investor in Houston. Why is selling to an investor an excellent option?

Selling Your House to an Investor in Houston TX

The Pros of Selling to an Investor in Houston

Quicker closing. Since most investors purchase with all cash, you can sell your property as soon as your two parties agree on the conditions of sale. The average time it takes sellers to close with an all-cash investor is two weeks. If you’re selling to a buyer who needs a mortgage, it’ll take you 60 days at the minimum.

As-is purchase. The investor isn’t planning on living in your home, so he or she (or the company) doesn’t care if your kitchen has been updated with a vibrant backsplash or if your toilets are new. In fact, many real estate investors look for homes that are old or outdated so they can fix them up and flip them.

Homebuyers in Houston TXThe little risk you won’t close for lack of funds. Most investors pay for properties in cash, so you won’t have the uncertainty that comes with a buyer applying for a mortgage. Even when a buyer has been preapproved for a loan, the lender can decide the buyer’s credit-worthiness has changed and refuse to issue the funds needed to buy your home.

Before you sign a purchase agreement, you should ask the investor for proof of funds. This can come in the form of bank or money market account statements that show cash or liquid assets in an amount that exceeds the purchase price of your home.

Potential for flexible purchase arrangements. If your home is underwater, or you’d like to get out of the real estate game altogether but don’t want to move, selling your home to an investor could be the way to go. Some investors will agree to take over your mortgage and some will even rent the house back to you in what’s called a sale-leaseback transaction.

The Cons of Selling to an Investor in Houston, Texas

Cash for properties in Houston TXYou might not sell your home at its true market value. Most investors are looking to buy homes at below-market value or at least, at a bargain. And, because they don’t have to tell you what they’ve planned for your home—like tearing it down to build apartments—you might not know its true market value.

You don’t always know who’s buying your property. Investors aren’t legally required to tell you who or what is actually purchasing your home. It could be a landlord known for shady renting practices or a developer who wants to tear down your house and turn it into apartments.

Cash for Houses in Houston TX

So, if you’re thinking about selling your property to an investor, you’re probably searching for pros and cons and evaluating what is the best decision for you in your circumstances. If you want to sell your house in Houston TX fast and sell it to Houston TX home buyers, reach out to us. Go look us up–Move On House Buyers–and we’d love to just have a conversation so that we can understand and help you make an informed decision.

Check out our video. We explain everything you need to know!

Check out how easy our process is…

Sell To An Investor - Should I sell to an investor? Pros and Cons
Video Transcription

Hi, my name is Johell Aponte with Move On House Buyers. And, if you’re like me, if you’re thinking about selling your house to an investor, you’re probably searching for pros and cons and evaluating what is the best decision for you in your circumstances. I wanted to take a quick three to four minutes to just break down for you the pros and cons of working with great real estate agents that we partner with all the time. Also working with these platforms such as the iBuyer programs out there versus a local cash investor. Really, why do so many people choose different paths? And so, if you want to sell to an investor or you’re looking to sell fast, take a quick look at what I’ll break down here regarding the pros and cons.

When selling a property, it’s probably our biggest asset here in the US and all over the world that we own, and it’s a very serious decision. And, it really comes down to what your needs, wants, and expectations are, right? So, let’s take a look at what are the main factors regarding whether you want to sell to an investor, or you want to sell fast for a cash offer, or you want to list it with an agent or work with an iBuyer program nowadays. So, the first one is the sales price. So, in terms of sales price, typically an investor will really be in the con section because an investor will give you what they call a fair cash offer, but it’s going to be relatively a low number. Then, you got the realtor agent who is really going to work really hard to market the property and get you the most exposure, the most eyes on the property.

Now, that does come with some take-and-give that we’re going to be discussing here in a second. And then, there are the iBuyers, and I put a question mark there because typically their offers, if you go through their process, their ‘sales price’ is high, like close to market value, but there are other costs associated with it that I want to make sure you understand before you decide to sell your house fast or sell your house to a cash buyer or an iBuyer. So, repairs, an investor will come in, they have a trained eye; at least at moveonhousebuyers.com, we can give you an on-site cash offer without an inspection period. So, we can assess the property, and if it qualifies for our programs, then we can give you a cash offer, not only without making repairs but no contingency periods. We’re going to talk about that here in a second.

With a real estate agent, a realtor, they’re going to ask you to do repairs to get it in showroom condition so that they can get you the best price on the open market. So, that is going to be a requirement. You’re going to have to up-front that investment to try and get that maximum value, okay. And, for the iBuyer, they will tell you, “Okay, you can go ahead and do the repairs for yourselves, or we can fix it and deduct that from the price.” Here, we get a green check for the iBuyer, red X for the realtor, and then on the repair side, we got a green check for the investor.

On the closing cost side of things, the investor will pay your closing costs and their closing costs. So what that means is that in reality, there’s title policy, recording fees, legal fee, attorney fees that need to be covered, and so, the investors should include that in their bid. With an agent, they’re just representing you as a seller, as a marketing effort; at the end of the day, everything’s negotiable, but typically, sellers pay for title insurance, their own fees. Typical buyers that pay the most use an FHA program, so they do end up asking for some help with the closing cost.

For an iBuyer, you pay your own closing costs and they pay theirs. And typically, as a seller, you end up paying the title insurance as well, okay. So, in terms of real estate commissions, obviously an investor does not charge real estate commissions, an agent does, and an iBuyer does not, right? In terms of certainty, as I mentioned, at moveonhousebuyers.com, if you want to sell your house to an investor or sell your house fast, we can go to the site and get you a no-obligation cash offer with no contingency period. I mean, we’ve looked at a hundred houses, we’ve bought hundreds of houses here in our market area, and we don’t really need to look at it through an inspector’s lens. We know what we’re looking at, and typically, if it qualifies, we can get you a no-contingency offer on the spot.

With the realtor, typically in the market, you’re going to have a 10-to-15 day inspection period where you have to allow access, turn on utilities for the property. You want to make sure you have vacant insurance if your house is vacant, in case you’re not liable for anything that goes on during those inspections. For an iBuyer, they do have an inspection period. They will want you to agree on paper, an agreement on paper before they spend money on inspectors. So, they will have an inspection period to back out, typically as little as seven days up to maybe 15 days.

And then, in terms of convenience fee, the investor doesn’t charge a convenience fee, right? That’s really a new term from the iBuyer program, and that’s why I put that orange question mark. The bottom line is that they do charge a convenience fee. So, if you go through the process of an offer with an iBuyer, they’ll give you pretty close to the market sales price, then you have to take into account that you’re paying your own closing costs. That you may end up either having to repair the house or having to give concessions to the inspection period and then they give you a service or inconvenience charge as well. So, make sure you’re looking at the bottom line at the end of the day.

For an agent, there is no convenience fee. Typical agent commissions in our area range around 6%, 3% to the buyer’s agent and 3% to the listing agent. So, bottom line, all this to say it depends on you. It’s what benefits you. If you want to sell your house fast, if you want to sell it to an investor, these are the typical reasons why people do that. Again, reach out to us if you’re interested in selling your property. Go look us up, moveonhousebuyers.com, and we’d love to just have a conversation so that we can understand and help you make an informed decision. Thank you so much.

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