If you’re wondering whether you should sell your house to an investor, you’ve come to the right place!
But first, let me introduce myself.
My name is Scott, and I’m a real estate investor in Dallas, Texas with 10 years of experience.
You might think I would be biased to tell you that you should sell your house to an investor.
But the truth is, selling your house to an investor is likely the best option only if:
- You want to sell your property very quickly;
- Your house is somehow distressed (as a result of divorce, bankruptcy, foreclosure, probate, tax liens, etc); or
- Or you aren’t interested in dealing with real estate agents, property listing and showings.
If your property is in great condition and you have the time to navigate the challenges of the traditional method, then selling your house with a real estate agent is probably best for you.
What we do and why we’d love for you to consider us!
Our specialty is buying houses for cash, on quick timelines, with no extra fees or commissions.
If you or your house are in a distressed situation, our discrete services might be exactly what you need.
But even if you decide to use a realtor—we have an excellent realtor working with us who can help!
The Traditional Method of Selling Your House
So what is the “traditional method” of selling your house?
Traditionally, if you want to sell your house, you have to hire a realtor and list the house on MLS.
MLS is the multiple listing service where most Zillow/Redfin listings come from.
It is also how realtors can see what is for sale in their market.
Once you list your house on the MLS, you would have prospective buyers walk through your home to make offers and perform various inspections on your house.
If one of these potential buyers makes an acceptable offer, most will finance the purchase with a loan, which will require the house to (1) appraise for at least as much as the purchase price and (2) be considered “safe, sound and structurally secure” by the lender and its appraiser.
Closing a transaction with a conventional loan always takes longer than a cash purchase and brings with it numerous contingencies for approval.
You might find yourself with a contract and a buyer, one week from closing, only to discover that the buyer is backs out because the lender did not approve the loan!
Should you sell your house to an investor? What’s Tricky about MLS
Listing on MLS can be a tricky business, and pricing homes is more of an art than a science.
I can tell you from personal experience that listing a house on MLS is stressful because you don’t know whether your realtor has priced the house correctly or whether the house is going to sit on the market for a long time.
MLS listings are very susceptible to the momentum of the market, by which I mean that if your house sits unsold for too long, more and more people think “Well, there must be something wrong with that house…”
It’s a vicious spiral that can create an unwarranted stigma on your house. Not to mention if you go under contract with a buyer who backs out!
And did I mention that you have to pay a pretty penny for using the traditional method?
Don’t let the “sales price” fool you when you envision how much money you will walk away with — focus on the net price that you’ll receive at the end of the day.
First you have to pay your realtor and the Buyer’s realtor (yes, you have to pay both out of your pocket), then you have to pay all the other “closing costs” (title policy, escrow fees, attorney’s fees, document prep fees, filing fees, etc.).
Often the realtor commission and closing costs can be up to 10% of the total purchase price!
That means if you sell your house for $295,000 on MLS, you might only walk away with $265,500 (and that’s if you had no loan on the property to pay off…).
What’s Hard to Predict About MLS Listings
What is also a little funky about MLS is what sells fast and what sells slow.
You never really know what the reception of your house will be like to the general public.
Is your house brand spanking new or in perfect condition??
If so, you should stop reading this article and hire (our) realtor because that is the perfect house for MLS.
More likely, your house’s condition is somewhere else on the spectrum and needs some love if listing with a realtor.
This kind of house is not going to create the same kind of positive reception on MLS.
If you have the money to fix up your house and make it “MLS-ready”, then the tradition method might be a great option for you (and our realtor can help you!).
However, renovation can be a tricky business.
If you know a lot about real estate investing, you probably have a great idea about exactly what to spend money on and what to save on in the renovation process.
If you don’t, the market isn’t very kind to a poorly managed renovation.
The last thing you want to do is spend money on a renovation that doesn’t make more money than it cost you.
Sound complicated and daunting?
The traditional method certainly can be—and that’s why realtors have a job and charge you so much!
Let me be clear though—if you have a good realtor and ample time (and money) to list your house with the traditional method, this is where you will generally get the highest price.
Should I List on Zillow / Redfin Myself (aka “For Sale by Owner”)?
This type of listing is often abbreviated as “FSBO” (for sale by owner).
Yes, you can do this (I have thought about doing it myself) — but I would NOT recommend this.
For instance, Zillow will give you the right steps to list your home on its site and you can upload pictures, come up with a price, and your house can be listed online in a matter of minutes!
Don’t fall for the façade of a free and convenient solution (it IS too good to be true). This strategy is laden with pitfalls, and you will likely be doomed from the start.
Why FSBO Falls Short
Here are just three quick reasons why:
- FSBO listings are HIDDEN, while realtors’ listings readily show up on listing searches
- Realtor’s use professional photographs
- Homeowners are generally unfamiliarity with the selling process
Most importantly, it is very hard to search for FSBO listings — go ahead, try to figure it out!
If you took my challenge and conquered it, congrats, you’re a genius!
But do you think the average buyer browsing on their phone is going to put in that kind of effort?? (Spoiler – NO!)
If prospective buyers can’t readily access your listing, then you will never get the appropriate visibility.
Visibility (eyeballs looking at your listing) is the key to obtaining the best price price for your house.
And that was the whole point of posting it online, right?
Additionally, in the age of Instagram and social media, pictures are more important that ever, and a prospective buyer won’t look twice at your self-photographed home if it’s not photographed in the best possible light at just the right angle (by professionals).
Finally, if you aren’t in the real estate business, you probably aren’t an expert on navigating the process.
Nor should you be!
Transacting a legal conveyance of real property can be tricky.
Mistakes can lead to lost money (or maybe worse–lawsuits), which is not what you want.
Conclusion – Should You Sell Your House to an Investor?
I am an investor who wants to solve problems and help people, but I don’t want to hide the fact that my business’s purpose is to make a profit by buying and selling homes.
If the traditional method is for you, our realtor is a rockstar who can help you list your home ASAP.
But our primary service is helping homeowners who have a home that is not a fit for MLS.
There are plenty of bad situations where your time and convenience are more valuable than getting absolute top-dollar for your home (home in disrepair, divorce, bankruptcy, foreclosure, probate, etc.).
This is where I come in.
The value I can offer sellers is in the:
- Speed of closing,
- Transparent “net” pricing (no fees/commissions), and
- Convenience of the process (I discretely evaluate your home, and you don’t do any work or pay for any repairs).
If you are still not sure what the best option is for you and your situation, tap the call button on the bottom of the screen and I will be happy to help you think it through.
I want you to be able to make the best decision for your situation, and if you decide that you should go the MLS route, we’ve got a GREAT realtor on our team that can help you do just that!
So either way, give us a call by clicking the button below — we’d love to help!