I Need to Sell My House Fast. Should I Sell to a House Flipper?

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sell my house fastAre you a homeowner asking How can I sell my house fast? The answer to that question depends on how fast you need to sell, and what condition your home is in. According to research conducted by the real estate brokerage company Coldwell Banker, the vast majority of prospective homebuyers will be looking for a home that is move-in ready. In fact, 80% of Americansopens PDF file  say they would prefer to buy a turnkey home over one that requires renovations, so if you don’t have the money to make repairs and upgrades before listing your home for sale—a house flipper might save the day.  

One of the best things about selling to a house flipper is that they will typically` offer you cash for your home. Also, the transaction will close much faster than listing, staging, showing, and then waiting for your buyer’s mortgage to close. Even if the house flipper is using a fix and flip loan to buy your property, a hard money house flip loan usually closes in one to two weeks compared to the one to two months a conventional mortgage will take to close.

If you are a homeowner who is trying to decide whether selling your home to a house flipper is a good option for you, consider these factors to help you make the best decision for your situation:

I Need to Sell My House Fast, But It Isn’t Move-In Ready

If you are considering listing your home on the MLS and having a real estate agent show it to potential buyers, ask yourself what impression homebuyers will get from the as-is condition of your house. Someone who is looking for a turnkey home will likely focus on everything that needs repair and every amenity that is missing. Where a typical homebuyer may focus mostly on the negative, a house flipper sees your “distressed” property in a positive light—as a project full of potential.

One thing you should be prepared for when you receive an offer from a house flipper is that the price they offer may be lower than what you would like to sell it for. The house flipper is an investor who will set an offer price for your home that will return a profit for them after they put all the money and labor into improving the home.

How Does a House Flipper Decide What to Offer for My House?

Many house flippers will use what is known as the 70% rule to determine a purchase offer for your home.  The 70% rule is a formula that allows for an offer estimate—using your property’s potential after repair value (ARV). The rule stipulates that a flip investor should not offer more than 70% of a property’s ARV in order to profit from the deal when the house sells.

Using the 70% rule does not guarantee that the house flipper will receive a certain specific return on their investment, but it does provide an estimate that takes into account the many expenses that come with repairing and reselling a home, for example, permits, construction costs, taxes, utilities, closing costs and any unexpected costs to bring the property to the market in move-in ready condition.  It is important to keep in mind that you will not receive a retail offer from an investor who will likely need to put tens of thousands of dollars of work in the home.

I Need to Sell My House in Weeks Not Months

If you have an emergency situation in which you need to sell as fast as possible, a house flipper might be your best bet. A flip investor who offers you cash for your home can reduce the sale transaction time from one or more months it would take to sell the conventional way, down to one or two weeks.

 

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