Would An Investor Buy My House In Sacramento For Close To Asking Price?

Selling a house in Sacramento, or anywhere for that matter, is a process. Whether it is to an investor/cash home buyer in Sacramento or a conventional buyer, everyone is going to have their own requirements. Everyone will want to see the value. What that really means is that it’s making sure that the house, its location, its age, its condition and its price align with the expectations of the buyer. The last thing that any seller wants is to have their house sit because their expectations were unrealistic.

Likewise, in order for an investor to really be interested, there has to be an opportunity that your house presents above any other houses being considered. The notion that real estate investors in Sacramento are different than any other buyers in Sacramento is preposterous. In this post we will look at the real conditions that answer the question “Would an investor buy my house in Sacramento for close to asking price?”

The short answer: It really depends on the investor and what the asking price is. Sellers should at least be aware of the whole dynamic that attracts real estate investors in the first place. Most houses that investors are looking at, need a lot of work. That is the opportunity. They take the unrealized potential that the house has and and work with that to create a future value for the work that we do. We then sell that added value to what we refer to as the retail buyer. So the question is really answered by the houses untapped potential that unlocks more value than initially meets the average buyers eye. But, we do it by paying cash.

Above all else, buying and selling houses is a dynamic that matches the needs of the buyer and the seller. Like any other sales transaction there needs to be value proposition that benefits both. In layman’s terms, no matter what I offer, if it is not in alignment with what the sellers expectations are, there is very little chance that I am going to buy that house.

So how in this sellers market, how do we get on the same page? It’s really pretty simple. One or both of us need to give and take until there is a meeting of the minds. In real estate it is called “the negotiation” or the “Counter Offer” and it happens everyday and some houses get a lot of offers and counter offers.

But, what most sellers dont understand is that depending on their house, its condition, location and price, each negative aspect of the house, reduces the number of buyers that would be interested. Buyers have many options to purchase other houses and every aspect of the houses condition, potentially excludes more buyers from the market. Getting sellers to understand that while their house may be a great bargain, there are many more options that buyers have to get what they want. Unfortunately for Sellers, fixer uppers that are overpriced will just sit.

It really is hard to tell a seller that their house needs $85,000 in work and without it being done first, the fair market value of the house is at least minus the repairs. But it is true. What makes that more difficult today is that even if they found a buyer that wanted a fixer upper but didn’t have the cash, the banks are just not going to loan the money. First, there are stricter lending rules that prohibit them. Long gone are the days when lenders offer buyers conventional loans for houses that need more than just minor repairs. From their perspective, they still feel the sting from the foreclosure crisis when buyers walked away because they couldn’t afford to fix houses that were already underwater.

So the more problems that a house has, it automatically limits the number of buyers especially if those buyers require financing;

As is with no repairs
All cash with no financing
no VA or FHA Financing
Conventional Financing a Possibility
No updates or Credits for Repairs
No Credits for closing cost
Buyer pays all closing cost

So when it comes to the marketing of a house you have two options:

You can sell it as is “on the market”. You hire a real estate agent, set a price and list the house, working with an agent to try and find a buyer (or trying to find a buyer yourself).
You can can sell it to a cash home buyer. an all cash sale. Our formula is simple, fair market value, minus the cost of repairs and minus some holding cost.

If you’re wondering, “Would an investor buy my house in Sacramento for close to asking price?” then here’s what you need to know:

Why Investors Invest

Basic real estate investing is a buy low sell high proposition. It happens every day at the courthouse steps for foreclosures and tax lien sales. But that is not the only real estate investor play. Real estate investors look for houses that have unrealized potential. In all of the properties that they are considering they try to determine that extra value proposition. There is a creative aspect of what we do that makes it a lot of fun.

Its is like a puzzle and a gamble at the same time. My name is Peter Westbrook and I am a cash home buyer in Sacramento. I can break down what I do very easily. I look for the untapped potential in a house. It is about taking something that is rough and damaged in many ways and making it into something else that others just can’t see. It is often a remake of an older house into a new version of itself. It is why I wake up in the morning. But there is substantial risk of loss and that is why I am very selective about my houses and LIKE that they are in the worst possible shape. There is lies the opportunity. I am not a lipstick on a pig investor. I want to remake houses.

We often take an existing 2 Bedroom 1 bath home in poor condition transform it into a 4 bedroom with master suite and spacious gourmet kitchen. We frequently pull permits, knock down walls, open up other rooms and add living space to add real value. We buy houses at one price point in the market and leap to the top of the market. We do that by paying the fair market value of a house minus the repairs and some holding cost.

The truth of the matter is that a house that needs a lot of work is already discounted by the marketplace. You see it in every neighborhood by the variance in pricing based on the houses location, its age, its condition. The price reflects that. The buying processes keep that in check. That is why there are numerous inspections, an appraisal and of course the lenders approval. If you recall, I said earlier, that houses that need a lot of work cannot qualify for financing and that is a big negative and discount factor that sellers wrestle with. There are not a lot of people walking around with bags of cash willing to pay whatever you want sight unseen.

So, an investor buys real estate because they hope to add value. You can only accomplish that by finding properties that have a special potential that no one else sees. I hear it all of the time… the house just needs paint and new flooring. Yet the roof is 40 years old, the windows are wood framed single paned, the kitchen is from the 60’s and the bathrooms are a product of the 80’s.

It is pretty simple, real estate investors in Sacramento are interested in houses that are affordable for them to buy.

Before you establish an asking price, think about what benefit an investor provides you by eliminating all of the steps in the sales process where most house sales fall apart. They have cash, they close quickly, you pay no commissions, you make no repairs, there are no appraisals, no open houses, and you get to pick your closing date…

Understanding The Investor vs. The traditional Sale

What we are talking about here is not a traditional sale. Real estate investors are not buying the prettiest houses on the block. If you have one of those chase the market… especially now when the prices are rising and the buyers out number the supply. Chances are you are going to achieve your maximum equity when you sell, in spite of commissions to real estate agents. My advice to you is hire the best real estate agent (the best cost the same as the worst) and negotiate the hell out of your commission rate. (Most sellers don’t know that they can do that but understand that to a good real estate agent 2% is still better than 0%).

The Cash Sale

But, if your house needs more that just a little work the value proposition begins to get real competitive Sure your house is not getting the full market or top of market value pop. But, just like the prettiest house on the block, your house just got more valuable because in a sellers market (where there are less houses available than buyers) every house gets a price bump.

I get calls all of the time from people at every level of the housing market and it’s truly ironic that most of the people at the top of the market are more upset when I don’t make a bid for their house. On the other hand, the homeowners at the bottom of the market are shocked that I actually like their run down and ugly house is Sacramento. That is the paradox… my real target market is convinced that I would NOT be interested in their house that has real problems while the top think I am a fool. Maybe I am?

The Built in Cost When selling Traditionally

Even if you sell to someone on the market (with the help of a real estate agent), your asking price is the starting point and the buyer will usually want to negotiate a lower price or want other concessions and contingencies.

But here’s what most people don’t realize: the asking price has other factors built in… for example, it assumes that you have fixed up and cleaned up your property so it’s in pristine shape and ready for buyers. And, don’t forget that you have to pay bills, insurance, and taxes on your property the whole time an agent tries to find a buyer (which can take months). And then you’ll have to pay the agent a commission, which will be thousands of dollars.

So the asking price has all of these things “built into it”.

Where Investors Shine, We Buy As Is

Working with an investor, allows you to skip all of the frustration. When I buy I do it without inspections, appraisals and I pay cash. There are no conditions or contingencies that we can’t work out. In fact, it is usually the seller that has the contingencies regarding code violations that we pay for or tenants and family members that they want evicted.

You get to skip the open houses, the closing cost and the commissions that come right off the top and out of your equity. Later this morning I am driving to a house that I have purchased with a check for the tenants. It is a cash for key check. I pay them to vacate and in order to get it they have to move now. It cost the sellers nothing.

Additionally as the seller you don’t have to fix up or clean up your house so you can save thousands of dollars there. And, you don’t have to pay bills, taxes, and insurance for months while you wait for a buyer to be found, so you save thousands of dollars. And, you don’t have to pay a commission because no agent was used.

Add it all up: you save thousands of dollars by selling to an investor instead of selling with an agent.

Would An Investor Buy My House In Sacramento

Absolutely! Selling to an investor allows you to sell fast and avoid all those expenses. Compare the two and you’ll see that we take away most of the risk with some houses. In some cases that discount that you provided wasnt a discount at all but a leap to fair market value minus the repairs. There is a choice you can wait months and “gamble” to sell your house on the open market or call Peter Westbrook today.