Published August 2, 2024 by Susan Kadilak

Selling your home is a major decision, and choosing the right buyer can significantly impact your experience and outcomes. One option that homeowners often consider is selling directly to an investor, off market. But is this the right choice for you? Let’s explore the advantages and disadvantages of selling your home to an investor to help you make an informed decision.

Pros of Selling to an Investor

Deciding whether to sell to an investor depends on your personal circumstances and priorities. Common scenarios for an investor sale are:

  • The homeowner needs an urgent sale for financial, health, or other reasons.
  • The property condition is beyond repair or for some reason not eligible for traditional financing.
  • The sellers want the sale to be private and avoid the need for showings, open houses, and haggling with traditional buyers over home inspection issues.

In these situations, the pros of selling to an investor may outweigh the cons. Many investors can offer flexible closing dates with no contingencies and will skip the home inspection. Many investors will also take the responsibility of disposing of a home’s contents. These conveniences may make selling to a cash buyer attractive, especially if getting top dollar is not your priority.  Beware of investors who do a home inspection as a tool to negotiate your price way down, or charge you fees for handling the sale.  

Cons of Selling to an Investor

If maximizing your sale price is your top priority, you might achieve better financial outcomes by selling to a traditional buyer.

Investors purchase properties as a business and therefore will typically offer less than market value. Investors know that their offers come with convenience and flexibility for the seller, so they may use that as leverage to negotiate a lower price.

Selling to an investor can feel more like a business transaction than a personal experience. Investors are focused on numbers and profits, which might lack the emotional connection you might experience with a family looking to buy their first home.

Remember that not all homes are attractive to investors. They often look for properties that need significant repairs (which they can purchase at a lower price and renovate) or homes in specific areas where they can easily find tenants or flip the property for a profit.

Is it right for you?

Selling to an investor can be a great option for homeowners looking for a quick, convenient sale, particularly if the property needs significant repairs or if the seller is facing time constraints. However, it's important to weigh the potential lower offers and the transactional nature of the process against the benefits.

Before making a decision, I highly recommend getting a second opinion from a real estate professional. We recently had a homeowner reach out to our development company Kadilak Homes because she was looking to sell her home. She assumed it was a tear down and was wondering if we were interested in making an offer. After taking a look at the property, I gave her 2 options:

  1. Quick sale at a tear down price
  2. Go on the market and do a traditional sale

The price difference to sell on the open market was another $75,000 in the seller's pocket.  Once she saw the numbers, she decided that was well worth it and we sold the property to a traditional buyer who was looking for an affordably priced home to move into.

By having a full understanding of the pros and cons, you can make an informed decision that aligns with your goals and needs.