Learn about investment companies that buy houses, how the process works, and why this might be your best option for selling your home.
Many people go the traditional route of updating, listing, and selling their home to a buyer similar to themselves, who likely needs a mortgage. This can take weeks or months and is a fairly involved process for both the buyer and seller.
Just because it’s familiar, doesn’t mean it’s the best option. Selling to a home investor, who professionally buys and sells houses, can provide the unique chance to sell your home quickly for cash.
For expert advice about your situation, get in touch with Bolt and Beam today.
What you should know about selling your house to an investor
Investors often make it possible to get an offer on your home quickly, without having to update it, list it, or show it. Because they are often cash buyers, the sale can also close much faster than a traditional one, which relies on the buyer securing a mortgage.
If you decide to seek an investor outside of the traditional home-buying process, it’s important to understand what investor is right for your situation.
How traditional buyers and house investors differ
Traditional Home Buyers
Traditional home buyers search for a home to live in. Just like when you bought your current home, when traditional buyers purchase a home, it’s likely one of the largest investments they’ll make. Although it’s an investment, this likely isn’t the main motivation for purchasing a home. They’ll have various emotional reasons and lifestyle choices involved in making an offer on a home.
They rely on their perception of market value and other research to make what they consider is a fair offer. They may even pay more than fair market value because of a home’s unique characteristics or location that aligns with their personal goals, and to compete against other offers.
Whether they’re an individual or a company, home investors are professional home buyers who buy houses as financial investments. Whether they invest in only a few homes or buy and sell houses in bulk, they likely have a more standard timeline and system in which they buy and sell houses to earn a profit from their investments.
There are multiple different types of house investors, as we describe below.
Wholesale investors buy properties with the intention of reselling them quickly. To do this, they often don’t make renovations to houses before reselling them. Instead, they may purchase homes for prices that are lower than the market value and then resell them to other investors at higher prices. As these are often larger operations, they typically have demand for the houses they sell, with interested buyers already lined up.
House flipping companies and individuals typically buy houses at a lower price, knowing they need extensive renovations. Once they update the houses, they resell them for a higher price with the goal of making a profit, even after paying for the expenses associated with renovating each house.
Short for “instant buyer,” iBuyers are a newer type of investor that relies on data and efficiency to buy and sell houses. They make fast competitive offers based on data such as Automated Valuation Models (AVMs). The homes iBuyers favor likely need minor updates before reselling them.
iBuyers such as Opendoor, Offerpad, Zillow Offers, and Redfin Now often provide offers that are closer to fair market value because they rely on slim profit margins through buying and reselling large volumes of houses through a streamlined process.
Investors who buy-and-hold are working a strategy to grow the amount of property they own, which they then maintain primarily for financial benefit. For example, someone may buy a home that they rent primarily to earn income. Before buying a house, these investors use cap rate to compare if their yearly expenses are low enough, compared to their potential profit from renting a property.
A larger buy-and-hold investment operation might buy a property and be able to hold it, without earning income from it, as they wait for the right time in the market to sell it, or to build their real estate portfolio.
What does the process with iBuyers look like?
If your home needs minor updates or repairs, and you want as close to a fair market value offer as possible, iBuyers may be your best bet.
- By requesting an offer from an iBuyer, you’ll receive a cash offer within a day or two.
- Next they’ll connect you with an appraiser who will assess the condition of your home. This is the only time you’ll need to show your house during the sale.
- If the results of the inspection meet the iBuyer’s standards, they may then adjust their initial offer based on your home’s condition.
- After you discuss the final offer and reach an agreement, you can close the sale.
- At closing, you’ll receive cash for the sale of your home.
The entire process can take days, rather than weeks, or even months, unlike a traditional home sale. This gives you the flexibility to make your next move on your own timeline.
Reasons selling to an investor is the best option
Selling to an investor rather than a traditional home buyer saves you time, effort, and money by providing you with a simple instant offer for your home. This is ideal if you need speed and flexibility, such as during a divorce, when needing to relocate for a job, after a death in the family, to avoid foreclosure, or to pay off debt.
- It allows you to complete the sale of your home quickly, from start to finish.
- You don’t need to update or even clean your home as you otherwise would in a traditional sale where you need to impress potential buyers.
- You only have to show your home once and it’s to an appraiser.
- Because the timeline and process for selling your home to an investor is predictable and efficient, you have more freedom to shop for your next home or make your next move on your own timeline.
How Bolt and Beam can help
We can help you start the process to ensure you’re working with the best type of buyer for your situation and a buyer you can trust.
When you submit your address to us, we’ll provide a full home report. From there you can review our expert suggestions to move forward with getting an instant cash offer.
Contact us today or complete the questionnaire to learn more about how an investment company could buy your house.