Selling a House to an Investor In SF Bay Area

Selling a property in the real estate market can be quite stressful. It involves a lot of preparation and planning, such as repairs, staging, and listing. This process becomes even more complicated if the property has issues like liens or potential foreclosure. In such cases, selling to a real estate investor may be a better option.

Real estate investors, also known as cash home buyers, offer cash deals for all kinds of properties. The selling process varies depending on the type of investor—whether they are wholesalers, buy-and-hold investors, flippers, or iBuyers. Typically, selling to an investor is quick and straightforward, unless there are major issues with the property that cannot be resolved.

Selling a House to an Investor In SF Bay Area

If you want to learn more about professional investors, their advantages and disadvantages, the selling process, and other related topics, we have created this comprehensive guide. If you’re unsure where to start when selling your property to an investor, this guide is a good place to begin!

Generally, a property investor is someone who puts money into real estate or land. These buyers are good at managing money and know a lot about the housing market. They do this to grow their wealth and plan for the future.
A lot of property investors or cash buyers usually invest in four kinds of real estate: commercial, residential, industrial, and land. They buy properties for less than what they’re worth and hope they go up in value over time or after they fix them up.

To understand how selling to an investor works, we must first learn about the different types. The most common professional investors or cash home buyers that homeowners contact are buy-and-hold investors and house flippers. But iBuyers and wholesale investors also exist!

1. Wholesale Investors

Wholesale investors buy real estate below market price and sell it to another home investor at a much higher price. They don’t make any improvements to the property before selling it.

2. Buy-and-hold Investors

Investors who buy and hold homes do just that. They buy houses and keep them for a long time until they increase in value. Some of these investors buy homes to rent them out and make money over time.
Condos and single-family homes in areas with strong economies are usually what buy-and-hold investors go for to maximize their profits. They also like homes that require little to no fixing up.

3. House Flippers

Real estate flippers use a strategy of buying properties at low prices and selling them at higher prices for investment. They focus on properties needing repairs or renovations that owners are unable or uninterested in fixing.
With connections to local contractors, they undertake extensive repairs and then list the house on the local real estate market at significantly increased prices.
However, some flippers operate like wholesalers, requiring minimal or no repairs before selling the property to another investor. This practice is known as micro-flipping.

4. iBuyers

iBuyers are like tech-savvy cousins of home investors. They operate mainly online, using software to assess home values based on seller-provided data. As part of their real estate investment model, they usually charge a convenience fee. iBuyers have significantly boosted the prevalence of cash offers in the real estate market.

Now that we’ve discussed the different types of real estate investors or buyers who pay in cash, let’s differentiate them from typical buyers.

Typical buyers typically buy homes with the aim of living in them, so they seek homes that are ready to move into. This is very different from property investors who buy real estate for financial gain.

Whatever a property investor does with the property—whether it’s renovating it, renting it out, or holding onto it for its value to increase—it’s all about making money.

Furthermore, typical buyers are typically active in the real estate market. They search for houses to purchase on platforms like the MLS and other listing sites. On the other hand, property investors or buyers who pay in cash are direct buyers. Sellers usually reach out to them rather than the other way around. They often have websites where sellers can fill out a form to receive an offer.

Traditional Buyer vs. Real Estate Investor In SF Bay Area

Many home sellers run to reputable investors when no one takes an interest in their house on the traditional market, the property has issues, or they just want a convenient real estate transaction. But aside from these, there are a lot more reasons why sellers prefer dealing with home investors. Check them out below:

Foreclosure
Homeowners falling behind on mortgage payments and facing foreclosure often sell their property to investors to avoid auctioning their home.

Inherited Home
Individuals who’ve inherited real estate often opt to sell to property investors to sidestep property upkeep, mortgage payments (if applicable), tax obligations, and maintenance expenses.

Work Relocation
Homeowners needing to move for work often face tight deadlines, leading to double mortgage payments on their old and new properties. To sidestep the lengthy wait for a conventional buyer and manage dual mortgages, they opt to sell to cash investors.

Divorce
Couples who can’t decide who will stay in the marital property after a divorce end up selling it. And since they don’t want to deal with each other for long when finding a traditional buyer, they sell to real estate investors.

Tenants Occupying the Rental Property
Terrible tenants really stress out landlords. Some landlords choose to sell to investors or cash buyers to avoid dealing with them. These buyers move quickly.

Selling and Purchasing a Home at the Same Time
If the homeowner is already working on purchasing a new home, it may make more sense to sell to a home investor or cash buyer. This is to avoid paying two mortgages and property taxes as well as maintain two homes.

Major Damages
If the property has significant damage, especially to its structure, it needs fixing before going up for sale in the usual way. Fixing these issues can be pricey, running into thousands, so owners often prefer a cash offer rather than shelling out so much.

Major Damages
If the property has significant damage, especially to its structure, it needs fixing before going up for sale in the usual way. Fixing these issues can be pricey, running into thousands, so owners often prefer a cash offer rather than shelling out so much.

Home Financing isn’t Possible
Homes damaged by a storm or in poor condition due to age can’t get financing, so regular buyers struggle to purchase them. Trusted investors buy such homes as they are and handle repairs, making them the top choice for sellers in this situation.

As is with a traditional sale and working win an agent, selling a house to an investor also has its pros and cons. Let’s examine all of these so you can decide whether this is the path for you.

Pros of Selling to a Real Estate Investor

Selling fast to a nearby investor or cash buyer is low risk. You usually don’t need to fret about the deal falling apart because they have the cash to pay you upfront. Genuine cash buyers in real estate don’t rely on loans or mortgages to buy your property.

Cash buyers or investors can finalize a home purchase in just seven days since they don’t rely on mortgage approval. Once you accept their offer and there are no other property issues like unclear titles or debts, they can schedule the closing whenever you prefer. They also handle the closing expenses.

Lots of investors provide flexible buying deals. For example, if your home is at risk of foreclosure, but you prefer not to sell and leave, trustworthy investors can purchase it and lease it back to you. This arrangement, where the investor becomes your landlord, is known as a sale-leaseback agreement.

Real estate investors and cash buyers, particularly those focused on flipping or wholesaling properties, have the opportunity to buy houses as is. Therefore, you’re spared the need to undertake any preparatory tasks such as repairs or renovations. This arrangement can result in significant savings in both finances and effort for you. Typically, investors handle all necessary tasks to enhance the property’s value, enabling them to resell it or lease it out for a higher price.

As mentioned before, many investors don’t rely on financing to purchase your property. They offer cash up front, ensuring a swift transaction for your home. Financing delays are typical in conventional sales, as mortgage lenders need time for assessments and inspections before approval.

A traditional buyer usually decides the closing date of a home sale. However, in real estate investment, sellers have the flexibility to choose a reasonable closing date.

If you’re selling your property and prefer to close within a fortnight or just before relocating, that’s acceptable. Just inform the buying entity or cash buyer in advance for proper scheduling.

What makes typical home sales tricky is dealing with mortgage lenders. But when investors or cash buyers step in, they skip this hassle, making the process quicker and simpler. The seller just requests an offer, signs a contract, and finalizes the sale. 

Additionally, a professional investor has a local title company connection, so the transfer of the deed is a lot faster.

You can sell your house directly to a local investor without needing a licensed real estate agent or broker. This way, you avoid paying extra fees like real estate commissions, closing costs, and property taxes, making it less of a financial strain compared to a traditional sale.

Cons of Selling to an Investor

Possible Lower Offer

You can’t expect an investor or cash buyer to buy your house at a high price, especially if they’re buying it as-is. Often, in investor transactions, the offer is lower than market value because they’ll still need to cover repair or renovation expenses and closing costs.

Little to No Background of the Investor

You cannot require an investor to disclose their background before you sell your house to them. In other words, you won’t really know whether they are a developer, micro-flipper, or a shady businessman who plans to take advantage of you.
Nevertheless, you can do a simple background check on your own— check their website and the reviews of their previous clients to see if they can be trusted.

Potential Scam

Some scammers pose as real estate investors in order to swindle money from innocent home sellers. This is prevalent in all industries, so it’s vital to be careful when selecting your associates. Reach out to homeowners who previously sold their properties to the investor to verify their authenticity.

Foreign Investors Take Time to Close

If your investor isn’t in the US, the deal may take longer as they work out how to close. Overseas buyers often face tax issues when purchasing abroad. Selling your home quickly isn’t feasible with a foreign investor.

Before you go contact a real estate investor you found online, there are a few questions you have to ask yourself to ensure that selling your home to one is the right decision.

1. How Urgently Do You Need to Make a Home Sale?
If you’re not in a rush to sell your property, you may prefer to attract conventional home buyers to receive offers close to the fair market value of your home. However, if you need to sell quickly due to reasons like relocation, foreclosure, divorce, etc., it’s wise to consider selling to an investor for a fast closing.

2. What is the Current State of Your Property?
Homes with serious damage needing fixes are tricky to sell. It’s easier to sell them as-is to flippers and investors.
If your property is in good shape but needs minor upgrades like a new backsplash or lighting, you may prefer selling the usual way. But if you’re aiming for a quick sale of a perfectly fine home, you can opt for iBuyers or buy-and-hold investors.

3. Do You Have a Budget for Repairs and Staging?
When selling your house on the local market, it’s important to spruce it up and set the scene to attract potential buyers. These enhancements and improvements involved in the selling journey can be pricey, totaling thousands of dollars.
If you lack the funds for this, investors offer a viable solution as they typically don’t require any upgrades before buying.

4. Does Selling to an Investor Fit Your Moving Plan?
Selling to an investor can liquify your assets faster. That said, if you need money for the downpayment of a new house, this is your best option. Moreover, getting a fair cash offer is also suggested if you are moving to a new city due to employment. To avoid paying two mortgages at once, you can get rid of your property fast when you sell to an investor.

5. Will You Be Present Throughout the Sale Process?
People who have inherited a property but reside in a different state may not be able to actively participate in selling the house locally. It’s more practical to sell to an investor and allow them to manage all aspects of the property instead of going abroad and personally dealing with repairs, staging, and listing the property.

The process of selling your home to an investor depends on the type of investor you are dealing with. Although generally, you need to ask them for an offer, sign a contract, and close, there are some differences in how each investor deals with an average home seller.

Wholesale Investors

Selling to a wholesale investor isn’t that complicated. Typically, they’ll ask you to sign a contract that allows them to sell your property to another investor for a set period, without transferring the title to them.
Once the contract is signed, they’ll seek out a buyer. Their aim is to sell your property at a higher price, securing profit or a “finder’s fee” when the sale closes.
If you disagree with assigning the contract, or if state laws prohibit this method of home buying, a double escrow or double close may be necessary.
The wholesale investor buys the property, becoming its owner until they sell it to another investor for a higher price.
Buying the house from you and selling it to another investor can happen in a day, so it is tagged as a double close.

Wholesale Investors SF Bay Area

Buy-and-Hold Investors

Many investors seek rental properties for short-term gains and long-term growth. To sell to such investors, reach out for an offer, even if your property has tenants. Many prefer this, saving time on finding new renters. Once you agree and sign, the sale progresses to closing, and you’ll receive your funds.

Flippers

Property flippers operate similarly to typical investors, but they may propose a lower price as they take on the responsibility of repairing and renovating a property. To sell your property to a flipper or cash buyer, you can visit their website and complete a form or contact them directly. Typically, they will request to inspect your property to assess the necessary renovations. This evaluation helps them determine a precise offer. Upon accepting their offer, they will electronically send you a contract for review and signature. Subsequently, the sale progresses to the closing phase. Selling to a flipper guarantees a swift and straightforward transaction.

iBuyers

To sell your property to an iBuyer, you need to go to their site, enter your home’s details, and ask for an offer. Depending on the cash buying firm, they may give you an offer in under 48 hours. The offer is based on their software’s evaluation of your home. Additionally, they’ll arrange an onsite assessment to identify all necessary repairs. They’ll subtract the repair costs from their initial offer.
Once repairs are addressed, you can pick your closing date. Keep in mind, you may be required to cover closing fees and other expenses when dealing with an iBuyer.

Do Investors Buy Houses Below Market Value?

Usually, yes, investors purchase properties under the full market value or asking price as it’s a business move for them. However, the discount they’ll offer mainly depends on three factors— the investor type, property location, and its current condition.
For instance, a house flipper may buy your property at a reduced price to cover renovation costs and ensure a profit from rehabbing it.
Typically, flippers adhere to the 70% rule, meaning they’d offer around 70% of your property’s After Repair Value (ARV).
On the other hand, buy-and-hold investors may buy your property close to its fair market value, expecting returns from appreciation or rental income.
iBuyers also pay near the fair market value but prefer properties needing minimal repairs.

Do Investors Buy Houses Below Market Value In SF Bay Area

Typically, investors waive fees and take care of closing costs and other expenses linked to selling the property, ensuring you receive their full offer. However, if you engage a licensed real estate agent, the scenario changes.

When using a seller’s agent, you’ll typically incur a commission fee of 2.5% to 3% at closing. This payment is obligatory for their services, contradicting the advantage of dealing directly with an investor.

Are There Any Fees When Selling to an Investor In SF Bay Area

The fact that there are so many real estate investors that are advertising on the web is a bit scary. It is hard to identify which ones are legitimate and which are scammers.
To help you find a reputable investor, check out the following tips!

Research Your Options
Don’t rush into deals with the initial buyer you come across on the web. Take the time to thoroughly investigate all potential buyers in your local market or those from other areas eyeing properties in your neighborhood.
After compiling a list, confirm the credibility of each and assess their track records.

Check Reviews Online
A reliable method to verify an investor’s credibility is by reviewing positive online feedback. Look up reviews on Google and reputable business review platforms like the Better Business Bureau to confirm their past home purchasing successes. This process also aids in identifying investors who may pose challenges or make extremely low offers.

Check if They are Accredited
Generally, investors who are accredited by industry experts are to be trusted. After all, they won’t pass the stringent accreditation process if they are fraudulent.

Verify Their Experience
Selling to an investor can liquify your assets faster. That said, if you need money for the downpayment of a new house, this is your best option. Moreover, getting a fair cash offer is also suggested if you are moving to a new city due to employment. To avoid paying two mortgages at once, you can get rid of your property fast when you sell to an investor.

Learn About Their Fund Sources
One more tip is to inquire upfront about where investors get their funds. If they flip homes, they likely share a part of their recent sale profits with you. If they hold onto properties, they’re likely able to pay you in cash, having profits from other properties.
Investors unwilling to reveal their funding sources may be fraudsters.

Consider How Fair Their Cash Offer Is
While investors may offer less cash than your property’s market value, it shouldn’t be so low that you walk away with nothing.  If they’re lowballing you for a house needing only minor fixes, reject it and seek a fair deal from another investor.

Do Investors Buy Houses in Foreclosure?

Yes. Selling your house to an investor when it is about to be foreclosed is possible. They are the best option when a house is facing foreclosure since they close fast. In other words, even if it’s only less than a month before the house is sold in an auction, they can make a sale possible.

Do Investors Buy Houses with a Lien?

Yes. Investors buy houses even if a lien is discovered in closing. Yet, the lien’s value is key. If the homeowner’s debt surpasses the investor’s offer, they can’t bid higher. Essentially, the seller ends up with less money when the lien outweighs the cash offer.

Do Investors Require Inspection?

Typically, no. Investors usually skip inspections but perform a property walkthrough. They evaluate necessary repairs and upgrades to gauge the property’s condition accurately. This evaluation informs their offer. If an investor skips the walkthrough, they may offer excessively high initially, only to renegotiate later after contract signing.

Do Investors Buy Rental Properties with Tenants?

Sure. You can sell your property while tenants are living there by finding an investor. This is typical for investors who want to hold onto properties for the long term and aren’t looking to sell immediately. They prefer buying properties with tenants already in place because it saves them from having to search for new ones. But if the tenant causes issues, they may withdraw from the sale or ask you to deal with the problematic tenant before proceeding.

What are the Biggest Mistakes of Homeowners when Selling to a Real Estate Investor?

The biggest mistakes homeowners make when selling to an investor include accepting the initial cash offer without exploring other options and failing to check the legitimacy of the investor.

Accepting the first investor without considering other offers may lead to missed opportunities for better deals. Similarly, not verifying the investor’s background or expertise could expose homeowners to potential scams.

Do You Need a Real Estate Agent When Working with Investors?

You can sell your home to an investor without using real estate agents. There’s no need for staging, marketing, or listing. Just reach out to the investor directly and handle the paperwork yourself. It’s simpler than a traditional sale.

However, if you’re in another state or too busy to manage the sale, a real estate agent can act on your behalf.

Do Investors Back Out of Buying a House?

Buyers typically don’t withdraw from a real estate transaction after making an offer, especially if they’re able to pay in cash. However, if they discover the seller is deceitful or encounters significant property issues requiring costly resolution, they may still withdraw.

Selling a property to an investor has its perks, especially if your property has issues or if you’re short on time to sell. They offer quickly and let you choose the closing date, making it easier to coordinate with your moving plans.

If you’re unsure how to find an investor in your area or worried about scams, contact We Buy Houses in SF Bay Area.

We have a proven history of To get started with us, fill out the form below or call (408) 557-7554.

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The Easiest Way To Sell Your House Fast In SF Bay Area

You’re in the driver’s seat when you accept our cash offer for your house. We make the process simple, fast, and easy to follow when working with us. You have no obligation to accept our cash offer for your home when contacting us for a fair cash offer for your home. No matter the reason you want to sell your house, we want to buy your home as is. Remember that you get many benefits that include no real estate agent commissions, no cleaning, no improvements, and no stress. Our cash offer for your as-is house assures you of fast cash payment at closing with a reputable Title company. You can count on our company to give you a fair cash offer for your home! If you’re still thinking, “I need to sell my house fast”, calling us could be your best decision all day. 🙂

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Gagan Saini

Author: Saini

My name is Saini, and I founded the We Buy Houses in SF Bay Area team with years of experience in the real estate industry. I have assisted numerous sellers in selling their homes quickly, “AS-IS”, and for a fair price.

He’s been featured in multiple publications including Yahoo Finance, GoBankingRates, LegalZoom, The Mortgage Report, Apartment Therapy, US News and World Report, and SuperMoney among others.

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