Try to remember a time in your life when you were learning a new skill: Did you ever try to learn a musical instrument? Do you still remember what it was like to study for an Algebra test? What about learning to play a sport?
Have you ever noticed that for most difficult skills, it helps to have a coach or instructor to guide you along the way? The reason is that someone who is legitimately skilled and genuinely enjoys teaching can cut down your learning curve by pinpointing your mistakes with surgical precision and recommending a solid action plan for correcting them. Selling your house is no different. It’s a skill, and it pays to get educated and work with a professional who has been through the mistakes before and knows what he or she is doing.
Real estate investors pride themselves on buying homes quickly. Regardless of the condition of your home, a real estate investor will make sure that closing takes place within a few days and the transaction is smooth and hassle-free for you.
When you are selling to a regular buyer, it typically takes a much longer time to get your property sold (normally 2 months or more). No wonder the average number of days on the market for a home is about 100 days in the U.S., according to some studies. This is what a typical transaction for a residential property in Jersey City looks like today:
- You will first search for a real estate agent who will represent you. Your agent will promise to take care of advertising, showing your property, and all the legal requirements. You will enter into a contract with your agent, detailing commissions, the estimated sale price, duration of the agreement, advertising costs, process and much more. The commission can be up to 7 percent of the purchase price. So if your home is sold for $300,000, you will end up paying $21,000 to the agent.
- You will be concerned that certain cosmetic and non-cosmetic defects with the property will bring down the offer price, so you will be prone to spending thousands of dollars, as well as your precious time on making necessary repairs and remodeling certain portions of your home like the kitchen and bathrooms.
- Your agent will then list the property on Multiple Listing Service (MLS) and prepare marketing collateral (you will be billed for them). This generally involves photographing your property, drawing up floor plans and writing your online ads. The agent typically then holds open houses to bring in prospective buyers to take a look at your property.
- Next, you will likely have a home inspection performed, so that you can prepare a seller disclosure form. In Jersey City, you are also required by law to disclose any major defects with the property to prospective buyers.
- You will then wait for a buyer to make an offer. You and your agent will negotiate on an array of things including the sales price and various contingencies.
- After accepting an offer, the prospective buyer will make an earnest money deposit. It will be held in an escrow account. You will likely pay for any fees associated with the escrow services.
- The Buyer will first conduct a home inspection and then wait for the inspection report. If the buyer finds any defects with the property, another round of negotiations will start.
Is your time spiraling out of control? At this point, most property owners find it difficult to even keep track of how much time is being wasted
There are simply too many ways for things to go wrong at every step in the process if you choose to work with a regular buyer as opposed to an investor. Delays can be caused or deals may fall through if the buyer fails to get financing at the last moment.
But when you sell to a real estate investor, the deal is almost on autopilot. Your biggest obligation will be to settle on a price. You don’t need to waste time and money on most of the above-mentioned home selling steps. Here is why:
- They Buy with Cash: The biggest reason that investors are able to close deals quickly is because they buy your home with cash. Most regular buyers rely on financing from a conventional lender to purchase a home. It can take several weeks for a prospective buyer to get a mortgage application approved and have the funds released to the seller. When selling to an investor, you can be much more certain that the deal will go through to completion.
- They Buy Homes ‘As-Is’: You probably already know that repairs and maintenance can take up a lot of your time and money. They also typically require you to have a team of trusted contractors to do repairs. You can avoid this problem altogether if you sell to an investor who doesn’t care about your property’s condition. Most real estate investors buy homes ‘as-is’.
- Little to No Contingencies: There will be contingencies in the purchase agreement if you sell to a regular buyer. The deal will be contingent on a successful home inspection and the approval of the mortgage. But since investors buy homes as-is and for cash, there will be much less contingencies to worry about.
- No Marketing Required: You don’t need to hold an open house or bring prospective buyers for showings. You also don’t need to market the property and prepare marketing collateral. You don’t even have to hire a real estate agent, saving you a tremendous amount of time that could be spent doing something more productive or fulfilling in your life.
Conclusion
You may be under pressure to sell your home quickly. If so, a real estate investor will not only buy your home as-is, but also for cash. It will also save you from the hassles of undergoing extensive paperwork because the deal won’t be contingent on financing.
When you sell to an investor, you should try to find out who you are dealing with. Is it an individual or a corporation? To avoid any issues, get the name of the investor and do research online to see who they are and ask for references.
Investors have their own costs to contend with and you can be assured that those costs will be factored into their offered price. Investors are also aware of the power behind their cash offer and the fact that they are taking a risk by purchasing “as is.”
It all comes back to how you learned new skills when you were young. How did you cut through the noise and reach someone who is actually knowledgeable, skilled, and genuinely wants to teach? Did you look at reviews? Were you referred by a trusted friend or adviser? Usually, it’s the first time you pick up the phone and call them or meet them in person that you are finally able to wade through all the fluff and get straight to the point. A conversation is the fastest and most direct way to get to know someone and find out if they are legit. Everyone has probably had an experience where they meet someone they knew online or through the written language, and they turn out to be completely different than what their written persona seemed to convey. Don’t make the mistake of placing your complete trust in a stranger (including us!) based solely on the content you see online. Pick up the phone and call them.
““It’s hard to say exactly what it is about face-to-face contact that makes deals happen, but whatever it is, it hasn’t yet been duplicated by technology.”
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Written by Brandon Lor