Why Would Anyone Want to Sell A House to a Real Estate Investor?

(May 3, 2015)


So, why would you sell your house to a real estate investor?  My name is Jennifer and I am a real estate investment expert who lives in Los Angeles County.  I often have to defend my professional honor with answering this question.  Simply put, there are many reasons to sell your house to real estate investor.  And, for that matter, there are many reasons why you wouldn't want to sell a house to a real estate investor.  It comes down to what is best for you in terms of selling your house.

My Home Needs Lots of Repairs

Your home does NOT have to be in good condition to sell it.  When you are working with an all-cash buyer, you are not responsible for making any repairs.  When you list your house with a real estate agent, the buyers who make offers on your property will often ask for repairs to be made before closing escrow or they will ask for a large credit at closing.  Worse yet, many buyers won't make an offer at all if the house needs major repairs.

I Need to Sell House Fast

This is probably the second most common reason for selling your house to an investor.  This may be the perfect method for selling if the escrow needs to be as short as possible.  Oftentimes, there is a pending foreclosure, trustee sale, tax delinquency or some other financial stress that needs to be handled as fast as possible.

A typical escrow is 30 days or more.  More often, we are seeing 45-60 days on escrows to buyers who are getting a loan.  The banks are being very cautious in underwriting, asking for additional documentation on every aspect of the buyer's financial situation.  Trust me, I am selling a property now to a retail buyer and we've been in escrow for 45 days and it won't sell for another 2 weeks at least!  Ugh.

Difficulty Showing House to Sell

Sometimes, the seller of a house has difficult tenants.  They may even be family members.  Making arrangements for multiple showings on your property can prove impossible, especially with bad tenants.  My first recommendation would be to have the tenants move out, but many sellers can't afford the mortgage if there is no rental income.  And when you figure that the sale date could be 4-6 months (or more) away, that's a long time to make a mortgage payment with no rent to offset the cost.

I'm Overwhelmed with the House

This can be a tough one to admit.  But, if you have an inherited house, the process of getting it ready for sale can just be too much.  And that's okay.  It's hard to manage your own household, let alone a second one, especially if the house needs repairs, there are bad tenants living there, or there are financial or family strains related to the house.  Once you give yourself the much deserved break, you will see that the easy way of selling a house fast can be the best way, too.

Fair Price

The price I offer you will be fair market value. Most sellers don't realize that.  Compare that to signing up with a realtor and waiting month after month for your home to sell. And even then, you will be at the mercy of the market. You could end up having to settle for a much lower price than I will pay you.

For Sale By Agent or For Sale By Owner

To be perfectly clear, I often recommend to sellers that they fix-up their house, list it with a realtor and then they will get top-dollar for their property.  It does need to be the perfect scenario, however.  You need to have the money, the time, the ability to manage the remodel, and the patience after the home is listed to wait for the right offer and then another dose of patience during escrow when the closing (potentially) takes longer than expected.  Unless you are a former real estate agent or have bought or sold multiple houses before, I do not recommend the FSBO or For Sale By Owner method.  You could leave yourself very exposed legally, if you don't know the contracts and aren't ready to negotiate properly.

So, it truly is about determining the ideal situation for you.  The good news is, you have choices, even if you feel like you don't.

inherited house

Jennifer Shenbaum

Written by Jennifer Shenbaum

Jennifer Shenbaum is a real estate investor based in Southern California. She is a veteran of the housing market crash of 2007. Best of all, she offers free remodeling ideas to all who ask.

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