Selling Your Phoenix House to an Investor: Pros & Cons

Depending on the market and the area where you live, you may be desperate to find a seller, or you may have potential buyers lining up to participate in a bidding war. Before you decide to sell your house for cash to a real estate investor, it’s important that you understand the pros and cons first.

Pros:

  • Avoid Making Repairs. One of the most time-consuming (or expensive) parts of selling your house is getting repairs done when you’re trying to find a buyer or are meeting certain contingencies. Most real estate investors aren’t planning to live in your house. They’re usually willing to buy your house “as-is”, and they won’t ask you to make any upgrades or perform any repairs. You won’t have to worry about investing extra time and energy (or money) into the home before selling it.
  • Quicker Closing. An advantage to selling your house for cash to a real estate investor is the closing process is often smoother and quicker to complete. When investors buy your house with cash, it means they don’t have to obtain funding from banks or financial institutions. You won’t have to wait for them to get pre-approved for a loan or deal with delays if the lender has issues with their application or employment. On average, it only takes two weeks to close on the home when you accept an offer from an investor rather than through a buyer that has to get a typical home loan.
  • More Flexible Arrangements. According to sold.com, you can expect more flexible purchase arrangements when you’re working with a real estate investor because they’re more willing to accommodate you to purchase the house. If you’re underwater on the property, the investor may agree to take over your mortgage payment. They may even allow you to rent the house out from them to ensure you can continue to enjoy living on the property. You can have more options available to you if your situation is unique when selling the house.

Cons:

  • Selling for Below Market Value. When you sell to a real estate investor, you should expect to sell for less than market value. Investors are buying your home to make a profit: they’re not planning on living there. You shouldn’t expect to get as much for your home as you would when selling it to a typical buyer. Investors need to purchase your house for below market value so that after they’ve put the time and money into getting your house ready to sell, they can still make a profit.
  • You Have to Be Careful of Scammers. It’s important to keep in mind that there are many scammers who prey on sellers in an attempt to rip them off with the real estate transaction. If you receive a cash offer, you need to protect yourself and avoid losing money. If the offer seems too good to be true, you should be extra cautious.
  • Selling to a Foreign Investor Can Take Longer to Close. In some cases, it can take longer to close on your home if you accept an offer from a foreign investor. There are a lot of hoops that foreign investors have to jump through, which means they can suffer from negative tax consequences where they currently live when they choose to buy your house. Expect the sale to be delayed, which can make it difficult to know when you’re able to relocate and complete the transaction. Finding a domestic buyer can make it a smoother and quicker process that doesn’t require as much patience.
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