What to Know When Selling to an Investor
Selling to an investor can be one of the easiest and stress free transactions when selling a home. Or it could be awful, especially if you work with an inexperienced one and you don’t do your homework.
First, when working with a cash buyer or investor it’s just like a normal sale except there are no real estate agents involved. The transaction still goes through escrow and title. The escrow is the third party in the transaction and they handle all the paperwork for both parties. Pretty much the process goes as follows.
1. Both parties sign the purchase agreement (attached below)
2. Agreement is sent to Escrow and escrow/title is opened.
3. Escrow will get your information for the escrow instructions and closing date.
4. Buyer and seller sign escrow instructions
5. Buyer wires money to escrow
6. Seller signs deed.
7. Seller gets the money, buyer gets the property.
Obviously, there is a little more to it. But we try to keep it as simple as possible.
Working with an investor should be considerably easier. There shouldn’t be a ton of showings, few to none contingencies, less paperwork, and certainty that it’s sold. One thing you should always look into or should be your first call is to ask what escrow company the investor uses. Then, call them and ask them about the investor. How long they’ve been in business? Do they have good reputation? How long escrow has worked with them? If they’ve made escrow work way too hard or cancelled on deals they will tell you about it.
You should also see if the investor is accredited by any organizations like the Better Business Bureau and for how long. A newbie or inexperienced investor won’t have something like this. Another thing to check for is customer testimonials. Not only testimonials on their site but from public sites like google or yelp.
Lastly, use your gut. If the person or company you are talking to doesn’t give you a good feeling or said something that rubbed you the wrong way. Use a different on, there are a ton of companies that would like to buy your house. No reason to go down a road with someone you don’t like!