In my last article, I listed three ways you can sell your house quickly.
- Is through a traditional Realtor
- Use an investor
- Sell the home yourself.
For a quick review you can reread the article at: http://bonniebuyshousesfast.com/how-to-sell-your-house-quickly-colorado-springs/
In today’s blog I will be talking about how to sell your house through an investor. And some of the pitfalls to avoid when selling to an investor.
Before even considering selling to an investor, consider all your options. It is a good market in which to sell using traditional methods. DS News, an internet real estate web site reports that According to Realtor.com, the median listing price of homes in May this year was $214,900, a rise of 8 percent compared to year-ago levels. Month-over-month, prices ticked up 2.4 percent.
Of the 146 markets tracked in the survey, all but eight reported annual price improvement, Realtor.com reported. “This May’s housing market stands in significant contrast to last year in which price increases were less generalized and more concentrated in specific metropolitan areas,” the company said in its report. “This broad increase in price suggests a more evenly distributed recovery and a healthier national housing market.”
When you cannot sell your home through a real estate agent-or by yourself (for sale by owner) it is because of insinuating circumstances. The most common scenarios are: facing foreclosure, not enough equity, divorce, 60-90 days behind on payments, job loss, relocation, and major financial distress. In the case of people facing foreclosure or financial difficulties, getting rid of the house is the most common backdoor.
In most cases homeowners in that type of situation are looking for a quick fix to save their credit. In some instances a short sale is recommended which can be handled in most cases by a competent Realtor that specializes in short sales. A short sale is a process in which the Realtor negotiates a discount on the mortgage on behalf of the homeowner.
The short sale process will harm the homeowner’s credit, but is much better than the huge credit loss of a foreclosure. My advice in considering a short sale is to only use a Realtor that specializes in short sales. A short sale is a very complicated negotiation that can go south in a hurry using unqualified agents.
When the homeowner is in extreme distress and cannot pay their monthly bills and obligations, a fast solution is needed. In those situations, we, as an investor can pay some cash to the homeowner and take over the existing financing. This will relieve the stress and save their credit. It allows you as the homeowner to sell your house quickly. Another way that an investor can buy a home is all cash.
Investors pay all cash with houses that are in an estate, or a house that is owned free and clear. It could also be an inheritance and the beneficiaries want fast cash to settle the estate. By making payments on free and clear houses, cash flow can be created for retirees willing to hold a private mortgage. Disgruntled and or burnt out landlords usually fit this scenario. These are just some of the most common scenarios if you as a homeowner, are considering working with an investor
Most investors have integrity and genuinely enjoy helping the people that are in distress. But it is a business in which we have to make money. There are 2 types of investors to be wary of. The 1st is the new investor who is inexperienced and may not have the best solution. The 2and is the con artist who will tell you anything, and try to get you to close immediately.
Always, always, review the documentation and paperwork.
Never sign anything until you have had all your questions answered. As a seasoned investor with over 100 completed real estate transactions, I advise anyone who is selling a home-never sign documents with an investor at the first meeting. You should take the documents read them, go over them, and understand them. If you don’t understand them ask lots of questions.
Also, take them to a real state professional. An Attorney also can go through the paperwork and advise you of the pros and cons. Ultimately, the seller is responsible for making a good decision. A couple questions that you can ask a potential investor to get a feel for their professionalism, and experience, are as follows:
- How long have you been investing?
- How many real estate transactions have you completed?
- Do you have some literature, pictures, or forms I can look at, that show some of the transactions you have completed in the recent past?
- I would like to see 3-6 professional recommendations. Also, I would like to see 3 testimonials of people you have done business with that would recommend you.
Most serious investors have a website where you can check them out and look at their business model. Also, contact more than one investor if you feel you’re going to go that direction. After speaking with several investors you usually can pick up the professionals with integrity, by asking the right questions (1-4 above).
A professional real estate investor that knows what they’re doing, will have multiple ideas and really want to help. Investors that have little experience or con artist will seem pushy and not have your best interest in mind. If you don’t feel comfortable with the recommendations of an investor, don’t move forward. Always take time to sleep on it 2 to 3 days. It will not change the situation that much. Don’t be in a rush! Think it through and make the best decision that’s right for you.
As a real estate investor myself, I would have rather have someone think about my proposal and not do it, then someone who rushes the process and has seller’s remorse later. So, my advice to you is, BE CAREFUL! A home is one of the biggest investments we make during our lifetime. Ultimately it is up to you to make the right decision.
If you want to sell your house quickly, be careful who you work with. Check out Realtors and investors thoroughly. It’s your house, get the best solution for YOU!
David Van Gorder
VP Van Gorder Investments LLC