We have all seen the signs at intersections: “Cash Home Buyers”, “Joe Buys Houses”, “Avoid Foreclosure”, with phone numbers or a catchy web address. Who are they and what do they really do?
These are real estate investors (aka wholesalers), a company or person who contracts with a home seller to buy their house with cash. The real estate investor then markets the home to prospective rehabbers, landlords, or other buyers and assigns the contract to them, according to Investopedia. The homeowner pays no fees or realtor commissions. The time frame is much shorter than with a realtor because there are no showings and is an excellent way of selling a home if there are significant updates or repairs the homeowner doesn’t want to deal with.
How Does This Help Sell Your House?
Real estate investors provide a service to a niche market. They market directly those who make their living rehabbing residential properties, sometimes purchasing homes that have some significant defects. They have contacts that are constantly looking to make a home investment. If marketed by a traditional realtor, these homes could languish on the market for months, possibly years, simply because it's not worth the time or the commission for a realtor.
Say you inherited a house four states away. Or you’re getting divorced. Or you have a landlord property that you just don’t want to deal with anymore. Or, you are facing foreclosure. A cash house buyer or real estate investor might be the answer.
A real estate investor will purchase your home in any physical condition. You don’t have to pay any fees for staging, for inspection or a realtor commission. Real estate investors are motivated to get your house sold and have developed contacts who are always looking for a house to rehab.
Who Do You Choose?
Going with a real estate investor may be the best avenue for you if your house is older and has some issues that you don’t want to address. This saves the homeowner the hassle of finding and paying contractors to make repairs. And they usually will suggest a closing date of 30 to 60 days.
If you go with a traditional realtor, they may ask you to make some repairs or changes to the house to help it sell quicker. If you choose to sell “as-is”, a realtor may not be as motivated to sell your home, because of the repairs that need to be made. And on top of that, you’ll have to pay a six percent real estate commission.
The Nuts And Bolts Of The Process
Real estate investors work with people in all types of situations; divorce, probate, foreclosure, and landlord properties are all in the wheelhouse of the real estate investor. You will need to sign a contract with them (similar to a realtor), and they will market your house to their network of investors who are ready to purchase your home with cash. Using cash eliminates the delays and uncertainty of requesting a traditional real estate mortgage.
A Typical Example Of A Home Investor Purchase
You inherited a house, and it’s a time capsule of 1987. Floral wallpaper is everywhere, and you don’t have the time or desire to do any work on the property. A real estate investor will come and walk the property with you, and let you know exactly what they will need to do in order to bring the property back to the present retail value. They may tell you that homes in your area are selling for $200,000, however, these homes have solid surface counters, new cabinetry, and a host of other newer items. They may offer you $100,000 for the house, based on all the work that they will do to make the house salable and obtain a cash offer with a quick close. The real estate investor will write up the contract, you’ll sign it, and they will start marketing the house immediately to their list of buyers. In a short period of time, you’ll be out from under the time capsule, and you’ll be $100,000 richer.
Real estate investors fill a niche in residential real estate. Their job is to find homeowners in distress and assist them in selling their homes quickly with no commissions, no showings, and no repairs needed. If a quick sale is important, with no repairs and no fees or commissions, then contact us today.