Do I Get Less Money if I Sell to an Investor?

This is the first question that anyone trying to sell a house quickly should ask. Why? Because it’s a very valid question. A lot of people think if they sell their house to a cash investor or cash buyer they are naturally going to get less money. It’s very understandable. When you sell a house, regardless of how you obtained the house, you want to sell it for as much profit as possible.

The basics of that need are simple; if I sell with a real estate agent, I have the potential to make more on the sale rather than a lowball cash offer from an investor. But that’s not the end-all result to selling with an investor. There are so many other variables to consider when selling a home to a cash buyer.

Let’s take it from the top. If you have a house that may need some upgrades for work done a real estate agent is going to suggest you make those changes, repairs or upgrades before listing the property. This could cost you anywhere from a few hundred dollars to several thousands of dollars depending on the type of work needed. Sure, you might get more out of the sale of the home because you’ve done these things. But let’s say you just want to sell the home as is. A real estate agent should accept those parameters and be able to sell the home, right?

Real estate agents want their job to be easy, and I understand that there are a lot of details in a purchase and sale agreement, but they also want the homeowner to fix up the property, so the house is decent for showings and attractive to buyers.

Many real estate agents won’t even take on a home in an as-is condition. They require some form of updating or repair before they list the property. So, right there you might be hitting a brick wall as to finding a real estate agent that would even list the home in its current condition.

But, let’s say you did find a real estate agent that will allow you to list the home and present state. Because of its condition, they will want to price it extremely low, possibly less than market value to attract the right type of buyer, a.k.a., probably an investor. Now, everything sounds great, right? You can sell to this investor or typical buyer, but now you have to pay the real estate agent anywhere from a 3% to 6% commission on the sale price of the home. Depending on the sale of the property this could be several thousand dollars as well. So, you got the house sold but you are missing several thousands of dollars in real estate commissions, and the home may have sat on the property much longer to attract the right type of investor or buyer.

Now, let’s say that a cash buyer or investor came along before you hired a real estate agent. They offered you cash on the spot for the same amount of money that you would’ve sold with a real estate agent. There are no commissions, and you won’t need to do any updating or repairs. Straight cash. 

So, you tell me if you would get less money? It all depends on how much the agent can sell it for and how much you could get from a cash buyer. It wouldn’t be a bad idea to get a figure from both and compare the added costs. The only thing that’s not certain is the length of time the house will sit on the market BEFORE being sold. Plus, a real estate agent cannot guarantee a purchase price either where a cash buyer can.

Want to know how much your home in Sacramento or surrounding areas is worth? Give me a call today! That’s what I do – Buy homes in any condition out right! I look forward to speaking with you today.