The days of getting low ball offers accepted are over. Sellers have the upper hand now. Not only are we in a sellers market but sellers are more aware of what their home is worth. Armed with online resources such as Zillow, Redfin, and Trulia, sellers can easily check on the latest market trends and get a good idea of the value of their home.
So what does this mean for investors?
You better step up your game! I’m not saying there is no longer a marketplace to purchase homes in need of repair for a discount. Let’s face it, you are not going to make the same offer on a house that needs a furnace, roof and major kitchen rehab that you would the same house that is in perfect condition. But you better come with a strong cash offer because there are 10 other investors with cash that want to flip the same house. And everyone knows the after repair value (ARV) is as high as it ever will be.
What does this mean for sellers?
You are in the drivers seat. You have options. There is always the traditional way of selling by hiring a real estate agent. But if you don’t feel like making small repairs or cleaning up you will probably do just as well selling to a cash buyer investor in this market. Investors are starting to pony up, competing with retail buyers and outbidding them. Cash is king and eliminates the need for an inspection or appraisal. This is a nice bonus if you are worried about your house getting exposed during an inspection or concerned an appraiser will have trouble finding good comps in your area.
Many sellers are turning to investors because the selling process is fast and requires almost no effort to get the house ready. It’s not surprising this has become a trend when sellers are walking away with the same amount of money (or more) after paying those costly agent commissions and closing costs.
So how do you find a legitimate cash buyer with credibility that will make a strong offer?
The real estate investing space has blown up over the past 10 years and there are literally hundreds of buyers (or wannabe buyers) out there. Some of them are just starting out and claim to have cash on hand, but really don’t. Some of them are looking to a do a couple flips a year as a side hustle and fish for someone to accept their low ball offer. Some are out of state and claim to know your market but don’t have boots on the ground.
However, in almost every market there are credible buyers out there who make strong offers and buy multiple properties every month. Because of this volume, they are able to outbid the competition. They are highly rated on Google, BBB accredited and have plenty of positive reviews to back up their service. These buyers are competing with the retail buyers and giving sellers an excellent option when it comes time to sell.
Do your homework when seeking out potential buyers. Many of them will have websites. Check reviews and BBB accreditation. Are they real people? Do they have pictures or videos? Make sure you are dealing with someone local. Verified google reviews can paint a good picture of previous sellers who have worked with them and are a good indicator they are active.
It never hurts to get an offer from a cash buyer investor. There is no commitment on your end and you might be surprised (in a good way) what the offer will be.