Should I Consider an Investor Offer?

By Laura Melquist

Meet Laura Melquist, a Realtor whose journey from Division 1 basketball to real estate has been nothing short of inspiring. With a winning mindset cultivated on the court, Laura has translated this into real estate by being a negotiation expert, navigating the real estate market for both sellers and buyers.

Recently, I received a call from a friend asking about an offer they received while trying to sell their home. Even though they had priced their home very reasonably, this offer was well below what they were expecting—what was happening? Well, this offer ended up coming from an investor.

In case you aren’t aware, offers from investors are becoming more common all across the country. According to Business Insider, 44% of homes were purchased by investors in 2023, and this number is expected to increase. So, if investors pay below market value for homes, why do so many people accept their offers? Or why would it even make sense for you to consider an investor offer when selling? To answer these questions, today, I’m going over three key benefits of investor offers you should consider when selling your home.

But first, lets go over the difference between a wholesale investor and an end-buyer investor. A real estate “wholesaler” is an investor who acts as a middleman between a seller and a buyer in a real estate transaction. The wholesaler finds a discounted property, puts it under contract, and then sells the contract to a buyer for a higher price. The wholesaler keeps the difference between the two prices as their profit. Wholesalers typically have a list of investors they frequently sell to so in some cases, it can be a good option.

On the other side an “end-buyer investor” is the person who is buying the home for the investment. They will be the one flipping the property and reselling it or holding onto it long term. They may be purchasing property directly through a wholesaler or directly through the seller.

Having a qualified real estate agent by your side should be able to help you understand the difference between these two types of buyers and the pros and cons of each offer for your specific situation.

Now that we understand the difference between the two types of investors… What are some of the reasons why you may opt to accept an investor offer?

1. Investors don’t care about the condition of your home. To get top dollar on the open market, you usually need to put in a little work. Painting, landscaping, staging, marketing, and more are necessary to truly maximize your sale. If you don’t have the time or money to put in this work, or you just don’t want to deal with the hassle, you might want to consider an investor offer.

They will pay for your home as-is, which means they don’t care if it’s a bit of a fixer-upper. However, investors typically use what’s called the “70% rule”. This means they’ll spend no more than 70% of the home’s after-repair value minus the costs of renovating the property. After Repair Value is the value they will be able to sell the home for after they fix the home up. As always, there are some investors that hope for more or less of a profit margin than this but this is typically the standard rule of thumb.

2. Investors close quickly. The market is a little slower than it used to be, and this can be a huge hurdle if you need to move as soon as possible. Fortunately, investor sales often move quickly. They’re used to buying homes on a regular basis, and there aren’t many negotiations when selling to an investor since they don’t care much about the condition of your house. They may even be willing to give you flexible closing terms to make it easier for you to find housing after moving.

3. Investors pay in cash. In real estate, cash is king. One of the most common reasons why real estate deals fall apart is because the buyer can’t secure proper financing from a bank. However, you don’t have to worry about that with cash buyer investors. Real estate agents love working with cash buyers because there’s no delay; if they have the money, they can get it to you immediately.

While it might initially seem like an investor is trying to lowball you, the truth is that they provide an option that gives you maximum convenience. If that sounds like something you might be interested in, call or email me, and I can get you a free quote for an instant cash offer on your home. On the other hand, if you’re determined to get the best price possible, I can help get your home ready for the open market with as little stress as possible. I look forward to hearing from you!