Selling your House to an Investor vs Using a Long Island Agent
When selling your home, even in a hot market like Long Island New York, it’s smart to look at your options and see how you can best reach your goals with the sale of your house. While you may be able to get a higher “top line” sales price listing with a local Long Island agent, that doesn’t always mean you’ll leave with more money in your pocket or less of a headache than selling your house to an investor.
The bottom line – review the numbers to determine how much money you’ll walk away with
When selling to an investor they will not be able to offer you full retail value for your house, however, when you factor in the other costs associated with a traditional home sale using a real estate agent, the scales could tip in the other direction, making the investor’s offer more valuable. Since a traditional home sale takes many months to complete, you need to factor in the additional costs of homeownership during that period – additional mortgage payments, taxes, utilities, and insurance. Additionally, in a traditional home sale, you will have to pay real estate commissions that don’t come into play when selling to an investor. Lastly, an investor often doesn’t care what shape the house is in, whereas it is often necessary to invest additional money to a deep clean and fix up a house before selling it to a traditional homebuyer – even simple improvements like painting add up quickly.
Here is a sample scenario that demonstrates how a lower offer from an investor can result in more cash for the seller than going the traditional route and listing the home with an agent.
|Traditional Home Sale||Sales to Investor|
|Net Value of Offer||$346,050||$350,000|
|Average Days on Market||90 Days||0 Days|
|Average Days to Close||60 Days||5 Days|
|Mortgage Payments while held||$8,000||$0|
|Real Estate Taxes while held||$9,000||$0|
|Real Estate Agent Commission (6%)||$24,000||$0|
|Repairs & Cleaning Needed to Sell Home||$8,000||$0|
Is it worth the headache – other factors to consider when making the decision whether to sell your house to an investor
Aside from price alone, there are a number of other considerations to make when determining whether selling your house to an investor or listing with a real estate agent is the right decision. You should first ask yourself is how quickly you want to sell your home.
Since 2006, the average time Long Island homes have been listed on the market has ranged between 80 – 140 days. On top of that, up to 15% of sales fall through for various reasons such as buyer financing issues, low appraisals or home inspection surprises, so there is a sizeable chance that the home could be left unsold for much longer if any of these issues arise. Evaluate whether you want to deal with the time commitment and stress of listing your home with an agent.
Also, consider whether you want to deal with making your home showroom-ready. Whether that means doing or paying for a deep cleaning, a new coat of paint, or more, there is going to be work that needs to be put into the home in order to sell it for top dollar. Additionally, while it’s being shown, you need to decide if you are comfortable having many strangers walk through your home while you spend your weekend afternoons out of your home so it can be shown.
Here is a comparison of the non-financial considerations you’ll need to make when choosing whether to sell your home to an investor or listing it with an agent.
|Selling w/ an Agent||Selling to an Investor|
|Inspection & Financing contingency||Yes, up to 15% of sales fall through||NONE|
|Repairs found during inspection||Typically fixed by the seller or offer price is reduced||None|
|Number of showings||Many||1 (just us)|
|Average days until accepted offer||+/- 90 Days||Immediate cash offer of your home|
|Closing date||30-60 days after accepting buyers offer||In as little as 5 days on the date of your choice|
In the end, it’s your decision whether selling your house to an investor or listing your home with a local Long Island real estate agent is the right move for your situation. You can contact Globalized Realty for a free, no-obligation, cash offer on your home and determine whether it is right for you.