Why Investors Won't Pay Market Value for Your Home

January 5, 2017

You've determined to sell your home and you'd like to sell it quickly.  You may have even received post cards or letters from investors saying they can buy your house for cash and close in just days.  Perhaps you went so far as to call one and were disappointed with their offer price.  After all you figured you could sell for at least the same amount as your neighbor. You just need to sell it quickly.  So why won't an investor pay what your home is worth?

 

To be honest this is a loaded question.  For the homeowner, it's about pride and recognizing the hard work they've put into the house over the years.  For the investor, it's just business, nothing personal.  Many investors actively look for properties they feel they can purchase for less than market value.  The objective is to leave enough room for a "good" profit after all of the repairs and upgrades are done.  If they purchase at market value there may not be enough appreciation room for a "good" profit.  Each investor has their own criteria, desired rate of return and preferred location.  To meet their objectives they often look for homeowners that are behind on their mortgage payments and/or for homes in obvious disrepair.  They are often homes where the homeowners need to sell quickly or face foreclosure.  In other words, desperate homeowners are the targets. 

 

If this is not the case for you, your best strategy is to hire a real estate professional and price your house aggressively.  In most cases, buyers willing to pay market value will need a loan so factor that time into your decision.  But if you're desperate to unload your home quickly then be prepared to except considerably less market value.

 

 

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