Know the Facts Before Selling Your Home to an Investor

1.  Property Classifieds The Home Of UK Property Resources Contact Us Hello, Sign in Register Home / Blog / Know the Facts Before Selling Your Home to an Investor Search Website Blog Keyword (Optional)  Select Category Search Now Back to search results  LIKE Posted on 26/05/2021 in For Sellers by Property Classifieds Press Know the Facts Before Selling Your Home to an Investor

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3. If your house is on the market, chances are most of the people viewing your property are either young couples looking for their first home, young families moving up the ladder and needing space to raise their children, or even older couples who are wanting to downsize. Whilst these people are looking to spend money, it’s for the reason of wanting to make a home.  However, another type of property buyer may have walked through your door – the investor – and they’re out to make money from your property. To them, your ‘castle’ is just another bricks-and-mortar product they can either rent out or turn, i.e. they can make money out of it. Yes, they have the funds available to purchase your property. Yes, the legal process is likely to go through far more quickly. Yes, the idea of selling to an investor is an attractive option. Yes, generally there are no fees to pay if you sell to a local investor, such as estate agent’s fees. But, there are advantages and disadvantages to selling your home to an investor. If you are going to sell your home to an investor, it is wise to know and understand both sides of the coin to this type of property transaction. What advantages would you have to sell your home to an investor? Purchase the property as-is: if you are in the position of not having that much money to play with, i.e. you saved enough to pay the legal fees, estate agent’s costs and other moving fees, but don’t have the funds to make a few improvements to your home before you market it, selling to an investor on an ‘as-is’ basis could be the option for you. A property investor is not going to live in your house so, why should they care if the kitchen is out-of-date, or the bathroom tiles are a little on the colourful side. Indeed, for many investors, they are looking for properties that need refurbishing as ideal ‘fix-and-flip’ properties. Cash buyers: many property investors buy in cash; this negates the need for seeking a mortgage. Alternatively, they will have sourced the funds from an investment pool in order to purchase a property. However, before you put your name on the dotted line, ask for proof of funds from the investor to ensure they can afford to purchase your house. This will be in the form of account statements, cash or liquid assets. Avoids repossession: if you are in the position of potentially having your home repossessed by your mortgage provider, selling to a property investor could well be a solution for you. Because they are usually cash buyers, they will be able to complete the transaction quickly. A faster legal process: generally, property investors are in the position to be able to exchange and complete on the purchase of your property far quicker than the average buyer, particularly if they are buying with cash. In the current property climate, selling to a buyer that needs a mortgage can take as long as 10-12 weeks. A cash investor can complete a sale in as little as 2 weeks. No fees: in selling to a property investor, you don’t have any commission to pay to an estate agent nor the property investor.

4. Sale-leaseback transactions: some property investors are in it for the long-term and may well be prepared to negotiate a flexible purchase deal. If you’re in the position of needing to sell your home but don’t necessarily want to move, the investor may be prepared to take over the mortgage on your property, or purchase the property if there’s no mortgage, and then rent it back to you for either a defined period of time, or until you do decide to move. These are called sale-leaseback transactions.  Disadvantages of selling your home to an investor Difficult to realise the true market value: one of the biggest drawbacks to selling your home to a property investor is that it is highly unlikely they will offer you the true market value. Property investors are looking for a bargain; they need to make a profit on the transaction as well as cover their costs. Therefore, they will make an offer that is below market value. There may be other factors impacting their purchase, such as their intention to demolish your home and build apartments, or they own land adjacent to your property and are looking to combine the two plots to build a larger project. That said, sometimes in this circumstance, they may offer you an above-market value. It’s always recommended you seek the advice of a local estate agent experienced in dealing with property investors to help you. The unknown buyer: just because they want to purchase your property, they are not legally obliged to declare who they are, or what they want to use your home for. Therefore, you could be selling your house to a property developer who wants to replace it with a new development, or a landlord that doesn’t necessarily have a very good reputation. Is it a scam? The one drawback of cash buyers is that you could be the victim of a scam. Be wary of investors that are an overseas or out-of-town purchaser, and that includes agents of these people, particularly if they have no interest in seeing the property or know little about the area. You could end up in the situation whereby all you’ve got to show for the sale of your property is a forged cashier’s cheque or a signed purchaser agreement that is not worth the paper it is written on. Always get an experienced estate agent on board who is used to dealing with property investors. Overseas time delay: it’s quite possible that property investors from overseas may struggle to exchange and complete on the purchase of your property as quickly as an investor based in the UK. Not only that, foreign property investors are now subject to an additional 2% tax by the UK government. If you are planning on selling your home to a property investor, always do your due diligence before you start rubbing your hands together in glee and sign on the dotted line. At Property Classifieds, we help sellers find suitable estate agents near me in Norwich. Our free service provides sellers with the best advice on how to sell their property, and with whom. If you’re looking to sell your property, have you considered contacting investors who want to increase their property portfolio? By listing your property for free on Property Classifieds, you are putting it in front of hundreds of investors searching for a property to buy in Norwich. If you’ve been approached by a developer or property investor regarding selling your house, Property Classifieds should be your first port of call for valuable advice and guidance. Connecting motivated sellers and buyers across the UK, we have a wide range of investment properties and property development opportunities in your local area, too. Contact us today for more details.

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