The biggest concern a potential seller will have about working with investors is the question “How much will an investor pay for my house?” This is a valid question but it has several different answers. Read on to see what type of offer you can expect from an investor and what type of investors you want to work with.
Three Main Types of Home Investors
An investor is someone who buys your home, looking to make a profit out of your property down the road or right away. There are different types of investors, however, and it’s important to know who you are working with before you sell your home:
Real Estate Wholesalers
A wholesaler investor isn’t the ideal type of investor to work with to experience a personable, customized transaction for your circumstances. Real estate wholesalers are usually an individual or group of investors who get your home under contract in hopes of them finding another investor to “flip” the contract to in exchange for a fee. While there is nothing illegal about this it can put you in a less-than-ideal situation as a home seller. Wholesalers don’t always disclose that they are looking to sell the contract to another buyer and if they are unable to find that buyer before closing then they might not follow through with purchasing your home.
If you work with a wholesaler who is upfront and transparent then there is no reason why you shouldn’t work with them or dismiss them right away. Make sure to ask a lot of questions about their plans for the property and their ability to close on the property.
Out of State Real Estate Investors
If you are approached by an out-of-state investor it could mean they are a wholesaler or are a cash buyer (read more below). When working with someone from out of state it’s important to look for these factors:
Are they willing to buy your home in as-is condition?
Do they require a home inspection?
Are they paying cash? (this means they could close in a week and ask them to provide proof of funds)
If not paying cash, do they already have a relationship with a good local title company?
How quickly can they close?
Unfortunately there are untrustworthy investors out there who would take advantage of your situation, making an offer on your home while really hoping to re-negotiate later when you are under contract and feeling pressure to close on your home. As with wholesalers, ask lots of questions and do your due diligence — a trustworthy investor should have references or happy clients he can refer you to to vouch for his business, especially when working with an out-of-state investor.
Local Cash Buying Companies
This third type of investor is usually the most trusted and easy to work with. When working with an investor there is certain criteria that should be met and local cash buyers often check all those boxes:
- A local cash buyer type of investor should already have the cash to buy your home. This means no waiting on financing and approvals from the bank, the cash offer is good to go.
- A local buyer who makes a living as a real estate investor will usually have a representative (or themself) that can come to your home or meet with you to make a fast cash offer. No need to meet with a third-party contractor or inspector to look at your home, the local investor will work with you personally.
- Local cash buyers purchase homes in as-is conditions. These types of buyers don’t require contingencies in the offer.
- Closing is quick with local investors. Ask if they can close this week and ask for proof of funds.
- A local buyer will already have an established relationship with local title companies, that relationship can help the process go smoothly and quickly.
How Much Will an Investor Pay for My House?
A lot depends on what type of investor you talk to. So who do you call?
How to Find an Investor to Buy My House
Sometimes an investor will reach out to you, other times you can do a google search for house buying companies in your area to find an investor to buy your house. Just remember to make sure that an interested investor meets all the following criteria to ensure that the process of selling your home benefits both you and the investor:
- Someone that already has the cash on hand
- Someone that will buy the home AS-IS (no contingencies and outside appraisals)
- Someone that can work with you directly and give you an offer on the spot
- Someone that understands the Utah market and works with a local title company
- Someone who is transparent with you and discloses everything (especially if they are not going to buy the home themselves, but try and wholesale it!)
- Someone that can close quickly (in a few days), or whenever you are ready
So now that you know what to look for in an investor, the big question remains:
How Much Will an Investor Pay for My Home?
In general an investor is looking to make a 10-15% profit from an investment home. This profit comes after any money spent on remodeling and maintenance and associated costs with selling the property. If you feel like you are getting low-balled by an investor, you might not be — they can’t offer the going rate on a home, spend money remodeling it and then lose money.
The upside is that the investor usually plans on improving the home which will increase the potential selling price of the home. Their offer can be based on the value the home will have AFTER they have remodeled the home. The After Repair Value is the amount of money they hope to receive by improving and selling the home for top dollar. If you are in a hot market then an investor can take more risks while a slow market might prompt them to be more conservative in their offer.
How to Sell Your House to an Investor
When you reach out to Gary with Gary Buys Houses you are working with a trusted, local, cash buyer who fits all the criteria of what to look for in an investor! Gary can offer a fast cash offer and close in as little as a week and he’s been buying homes here in Utah for more than 12 years. You can feel confident about working with a real estate investor to sell your home — in any condition — when you work with a local investor like Gary. Contact him and find out how much this investor will pay for your home today!