Ok, so you’ve done your homework, gotten three different investors to come over and take a look at your property, and all three have submitted a cash offer to you. Now what? How do you know which one to choose? Right now you might be saying, “Well the one that offers the most, of course!” Wrong! In an industry where more money certainly seems like the correct answer you may be surprised to know that is not always the case. Let’s look at some tips on how to choose the right cash buyer for your situation.
~ Evaluate each offer carefully!
It is important to look over everything on the contract, not just your bottom line. Are they asking for an inspection or option period? If so, why? In some situations an investor, knowing you will be getting multiple investors involved, will offer you a rather high number to be sure to lock the property in. They will make sure to include an option period and then try to work the homeowner down with laundry list inspection reports during that time. Offers should be made “As is/Where is”. Now it is possible that an investor requests an option period simply to do their due diligence. Sometimes during the course of this process a major deficiency that was not previously disclosed by the homeowner gets discovered. It is well within that investors right to come back to the homeowner to discuss renegotiating the terms. However, in many cases, the investor may just be trying to lock the contract in with a plan to strong arm the seller into a lower price later.
~ Do they have the cash readily available?
It is imperative that the seller ask for proof of funds from the buyer. Especially if the seller is in a time sensitive situation. A home buyer may have a money partner that they work with that they will need to get approval from. If you, as the seller, need to sell quickly you don’t want to find yourself in a situation waiting for some third party decision. You will be in the same situation as if you were dealing with a 3rd party lender. Additionally, some investors will get a property under contract with the plan to wholesale to another cash buyer. This can be dangerous, although it is legal. It is especially risky if you are facing foreclosure or some other default where time is of the essence.
~ What are your immediate housing needs?
Perhaps you need to stay in the house for a period of time after the sale or you simply need the cash to move with. How flexible is the buyer? Any lease back after purchase should be clearly spelled out in the contract to ensure everyone is protected.
Selecting the right cash buyer to sell your home quickly can be simple just by practicing the above suggestions. Choose the one that not necessarily offers you the most money for your property but that understands your unique real estate situation. An honest, ethical home buyer should make the process simple and straightforward.
Stay tuned for our next post….”3 Qualities of an Honest Home Buyer.”