When Not To Sell A House To A House Investor

Tuesday, January 16, 2018 - by Michael Rogers

We have all seen the internet ads or mailings that say, “We Buy Ugly Houses” or “We’ll Buy Your House for Cash Fast”.  These advertisements are from investors that buy houses.  They typically buy the house “as-is”, pay cash and are flexible on closing date.  For several situations, investor home buyers are a great solution to selling a house.  This article describes three situations it’s not in a seller’s best interest to sell to an investor.

House is in Great Shape

Do you have a house that is in great shape?  It doesn’t have any structural or cosmetic issues.

  Basically, it has few or none of the following issues: old roof, moisture issues, plumbing issues, electrical issues, old light and plumbing fixtures, outdated kitchen, old HVAC system, old water heater, out dated kitchen, single pane windows, painting, landscaping, etc.

If the house is already in great shape, then a seller will usually get more money by listing the property on the MLS.  Listing on the MLS can be done through a local realtor or a do it yourself listing service such as www.mlstosell.com. A typical full-service realtor will charge 6% of sales price and this fee will be split between the buyer and seller’s realtors.  If you list it yourself, then you can typically save 3% by only having to pay a commission to the buyer’s realtor.

Not Motivated to Sell

If a seller is in a situation where getting full-price is the primary objective and she can wait a couple years to sell her house, then selling to a house investor probably won’t work.  An un-motivated seller is typically a person that wants to get top price for the property and they don’t mind holding the property until they get the price they want.  Oftentimes, the house has no mortgage, the seller doesn’t need money, or the property is rented to good tenants.  The unmotivated seller’s best option is to hire a realtor to list the property and see if someone will come along willing to pay the price they want.  

Weekend Warrior

Are you handy around the house?  Do you enjoy weekend “Do it Yourself” projects such as painting, changing light fixtures, updating bathroom tile? Then you are a weekend warrior.  In most cases, a weekend warrior that is willing to sacrifice their nights and weekends can make smaller repairs and updates at a substantial savings to a contractor’s price.  Since a professional home investor will be paying a licensed contractor to make these repairs it will come out cheaper for the homeowner to make the repairs themselves and sell it for a higher profit. 

When it Typically Makes Sense

For a professional home buyer to stay in business, they must purchase the house at a price where they can pay for repairs, allow for a margin of safety for any items they miss in the estimate, pay loan costs, property taxes, insurance, etc. while the home is remodeled.  They also must price in a profit for the 3 to 12 months they will be working on the property.  Therefore, they aren’t typically able to offer the highest price.  However, a good house buyer will make the selling process super easy for the seller. They will provide excellent service, buy the property as-is, and close on the date of the seller’s choosing.

In my experience, the most common situation that a professional home buyer can buy a house and create a win-win for both the buyer and seller is when the seller has inherited a house that has a lot of deferred maintenance.  Typically, the seller is not a handyman and is not interested in managing contractors or investing an additional $20,000 to $50,000 in repairs to get the house ready to sell.  In this case a home buying investor can buy the property as-is, pay cash, and close on the date of the sellers choosing.  This creates an easy solution for the seller.

For more information on selling a house to a home investor contact Michael at www.sellmichaelyourhouse.com.   



Many Agents Join Keller Williams

The Keller Williams Market Center, under the leadership of Jay Craig and Jennie Brockman, has added an unprecedented number of new agents to the rosters of the East Brainerd, Hixson and Ooltewah offices in the first half of 2018.   Some agents are just beginning their careers and there are agents that have decided to join Keller Williams from other companies in town. ... (click for more)

CDOT Announces Extended Road Closure On W 3rd Street

The closure on W 3rd Street between Market Street and Broad Street has been extended until Aug.15 due to weather delays. W 3rd will be closed daily between 9 a.m. and 3 p.m. until Aug 15 for storm drain pipe installations. View CDOT's map of event and road closures for full details of projects underway in the public space.   (click for more)

Lebron Hankins, 62, Stabbed And Killed Late Friday Night In Rossville

Lebron W. Hankins, Jr., 62, of Rossville, was stabbed and killed Friday night. Walker County Sheriff's Office deputies responded to a 911 call at 2012 Rogers Road, Rossville, on Friday. The call was received by 911 at approximately 10:59 p.m. Upon arrival, deputies found one person injured and Mr. Hankins was pronounced dead at the scene. The second person was ... (click for more)

Wall Collapses At Home On Bradford Place Drive

Chattanooga firefighters were dispatched to a structural collapse call shortly after  10 a.m. on Saturday .   When firefighters arrived at 307 Bradford Place Drive, a large hole could be seen on one side of the house. Battalion Chief Don Bowman said an exterior wall collapsed into the basement. There was some initial concern that an elderly resident might ... (click for more)

Harold Austin Will Be Greatly Missed

My dear friend, longtime public servant, Mr. Harold Austin, will be greatly missed. He was with the state of Tennessee and Hamilton County for many years. Doyle Ray Marler (click for more)

Roy Exum: 90% Can’t Do Math

Friday’s newspaper headline blared, “Hamilton County Schools see dramatic growth in student performance” and that, my friend, is “fake news” at its finest. A better try might be, “90 Percent of Kids In Chattanooga Can’t Do Math.” Let’s face it: We know that a full 70 percent of 43,000 students in our public school system are not on track, this based on state test scores, and -- ... (click for more)