Selling a House to an Investor: Pros and Cons

If you need to sell your home quickly and want a hassle-free transaction, selling to an investor could be a smart choice. Investors can often close within a week or two, bypassing time-consuming steps like inspections, financing approvals, and appraisal contingencies.

The downside is that investors typically pay less than fair market value for homes. But if speed and convenience matter more than maximizing your profit, selling to an investor might be the best fit for your situation.

"Working with investors suits sellers needing quick, hassle-free sales, like those inheriting properties," says Charles H. Chandler III, CEO of My Tennessee Home Solution. "If there's no urgency, sellers might benefit more from a realtor who can market the property to a wide pool of potential buyers and potentially get a higher price than an investor would offer." 

Ready to explore your options? We can connect you with serious cash buyers in your area, allowing you to compare tailored offers and find the best deal. Plus, you can request a professional home value estimate to weigh offers against your property’s market potential. There are no fees or commissions — just quick, competitive cash offers from top local buyers. Fill out this short quiz to get cash offers today!

Should I sell to an investor or list with an agent?

The best way to sell your home depends on your goals and needs as a seller - whether you aim for speed and convenience or maximizing profit.

⚡ Selling to an investor: Best for a fast, hassle-free sale

Investors buy homes as-is, close in as little as a week, and pay in cash, eliminating financing delays. However, investors typically offer less than market value to account for repairs and their profit margins. We highly recommend you compare multiple cash offers and research buyers online to ensure you work with a reputable investor. View our top cash home buyer picks.

💰 Listing with an agent: Best for maximizing profit

A traditional sale can take three to four months but often results in a higher sales price due to market exposure and the potential for bidding wars. With an agent, you may need to make repairs, stage the home, and pay commission fees, but you’ll have a better chance of maximizing your profit. Get connected to top-rated local agents today.

Pros and cons of selling a house to an investor

✅ Fast closing

It takes sellers 70 days to receive and accept an offer and another 30 to 45 days to close on a traditional home sale nationwide.[1] However, real estate investors can get you an offer within 24 to 48 hours and close in as fast as seven days.

Investors like Chandler III, CEO of My Tennessee Home Solution, emphasize quick closings, influenced by the seller's urgency and property location. 

"The property's location heavily influences our offers and the extent of needed renovations, typically cosmetic," he explains. "The urgency of the seller's timeline can also lower our offers to minimize risks associated with quick closures."

Consider a cash home buyer if you need to sell ASAP, whether it's due to personal situations like relocating for a job, a divorce, a death in the family, or financial difficulties forcing you to sell.

✅ Sell your home "as-is"

One of the biggest advantages of selling to an investor is the ability to sell your home as-is, without making repairs or improvements.

• Investors buy homes in their current condition, whether they need minor cosmetic touch-ups or major structural repairs.
• Skipping repairs can save you thousands of dollars and weeks of preparation time.
• Traditional sales often hinge on passing inspections, but investors usually accept the property as-is, simplifying the process.

This makes as-is sales ideal for homeowners with properties that need significant work or for those who want to avoid the hassle of repairs altogether.

✅ Relatively smooth process

Real estate investors can also make the home sales process relatively painless compared with the traditional home sale process.

• You don't need to clean, repair, host open houses, or upgrade your home before selling it.
• Cash buyers usually don't require contingencies that would delay the transaction. Instead, they'll often use inspectors and contractors to estimate repair costs and deduct them from their offer.
• You don't need to worry about financing issues since real estate investors usually pay in cash.
• Since investors handle much of the process, including paperwork and repairs, it can be an easier and less overwhelming experience for sellers.

Selling to a real estate investor offers a fast, hassle-free option for convenience and certainty.

✅ Flexible closing time frame

Real estate investors are usually flexible about setting a closing and moving date. This is especially useful to sellers who need to sell quickly to move by a specific date.

Unlike traditional buyers, who may have rigid timelines due to lease expiration or the closing date of their own homes, investors can often adapt to your preferred schedule.

This flexibility means less stress for you and more control over the process. If unexpected delays come up, like needing extra time to find a new home or arrange movers, investors are often willing to adjust, making the sale much smoother and easier.

✅ Lower costs of selling

Real estate investors often pay less than fair market value for homes. But selling to an investor means you may avoid paying realtor commissions, which currently average 5.32% nationwide, or closing costs, which cost another 1-3% of a home's sales price.

You also won't have to spend a dime on repairs or improvements to prepare your home for sale. Depending on its condition, this can save you hundreds (if not thousands) of dollars.

❌ Lower sales price

Listing your home on the open market with a realtor will probably result in a higher sales price. This is the best way to attract multiple offers, potentially driving up the final sale price.

Investors typically make take-it-or-leave-it cash offers, leaving little room for negotiation. Investors often pay 70% (or less) of a home's after-repair value, which includes the sales price plus its estimated repair costs. For example, a home worth $500,000 that requires $50,000 in repairs might only sell for $300,000 to an investor.

There are some exceptions, however. For instance, Brendan Grey of Grayscale Wholesale notes, "We sometimes offer up to 75% of the property's after-repair value (ARV), especially for homes needing only cosmetic rehabs."

Therefore, the 70% rule is just a starting point for investors and not a hard rule — some investors might be willing to pay a bit more for a property if the numbers work. You can always shop around and compare offers from competing cash buyers to negotiate a higher sales price.

❌ Irreputable cash home buyers

There's no shortage of real estate investors that buy houses for cash. Unfortunately, not all investors are legitimate.

Some 'we buy houses' companies make lowball offers, while others may engage in scams, such as phishing emails, equity skimming, or fraudulent agreements designed to strip homeowners of their equity.

Sometimes, unscrupulous investors may use high-pressure tactics to rush sellers into accepting offers without proper due diligence. Others might include hidden fees or ambiguous contract terms that leave sellers with less than expected. Always vet potential buyers carefully to avoid these risks and ensure you deal with a trustworthy company.

» MORE: Are 'We Buy Houses' Companies a Rip-Off?

How to avoid cash home buyer scams

To mitigate the risk of scams, Chandler advises sellers to "ensure they're dealing with reputable investors by checking reviews, BBB profiles, and listening to testimonials."

Read online reviews

Most legitimate cash home buyers have dozens of online reviews from actual customers. A quick Google search of the company name should surface the reviews and any complaints.

Check Better Business Bureau (BBB) accreditation

Businesses must meet ethical standards to qualify for BBB accreditation. The BBB also rates companies on an A+ to F grading system. It may be a warning sign if a cash home buyer isn't BBB accredited or carries a low BBB rating with unresolved complaints.

Screen for legit bids

Our team can help you avoid falling for a real estate scam. You'll get offers from reputable investors and We Buy Houses for cash companies.

Who should consider selling a house to an investor?

Homeowners who need to sell ASAP

Selling to a real estate investor is worth considering if you value speed and convenience over profit. Cash home buyers can make you an offer and close in about 2 weeks, compared with the 3–4 months it typically takes to sell a home on the open market.

Common reasons to sell your house fast

• Moving due to a job relocation
• Inheriting an unwanted property
• Liquidating assets because of a divorce
• Impending foreclosure

» MORE: How Can I Sell My House Fast Without Losing Money?

Homeowners with properties in poor condition

It's harder to sell a house in poor condition vs. one that's move-in ready. Investors, such as Lopez from House Love Treatment Buyers LLC, prefer homes that offer "significant value-add opportunities," ideal for sellers with properties that may require substantial repairs.

Poor condition means your home has serious issues that likely cost thousands to fix — not minor cosmetic items or maintenance needs. Examples may include:

• A roof that requires replacement
• Major structural damage
• Black mold

Investors prefer to buy homes in poor condition, so selling to them off-market allows you to avoid common roadblocks, like buyers backing out of the deal because of a poor home inspection or a lender's home appraisal coming in low.

Expect investors to hire an inspector and contractor to estimate the cost of repairs and then factor those costs into their offer price. If they don't overestimate their rehab costs, there's a good chance they'll make money on the deal.

Homeowners in financial distress

A quick sale to an investor might be desirable if you're behind on your mortgage payments and need to sell ASAP to avoid foreclosure.

Investors usually don't shy away from buying a house in financial distress because they pay all cash for houses. This allows them to close the deal before a bank or lender puts the home up for auction.

How much will an investor pay for my house?

ARV	70% of ARV	Max offer price
$500,000	$350,000	$315,000
$400,000	$280,000	$250,000
$300,000	$210,000	$160,000

*Example based on a $50,000 repair budget. These are general guidelines, and actual offers may vary based on market conditions, property conditions, and investor strategy.

The table above demonstrates how real estate investors use the 70% rule to determine their maximum offer price for a property. The calculation is based on the property’s After-Repair Value (ARV) and estimated repair costs.

Here’s how it works:

• ARV: The estimated market value of the home after all necessary repairs and improvements.
• 70% of ARV: The investor typically aims to pay no more than 70% of the ARV to ensure they can make a profit after repairs.
• Max offer price: The maximum price an investor is willing to pay, calculated using the formula:
  (ARV × 70%) – Repair Costs

Real estate investors usually follow the 70% rule, which means they may only pay up to 70% of a home's after-repair value (ARV).

Let's say an investor believes your home is worth $500,000 before repairs and improvements. If they determine your home needs $50,000 in repairs, they'll pay you no more than $315,000.

Lopez illustrates this with, "For a property with an ARV of $300,000 and $50,000 in repairs, our offer price would be calculated as ($300,000 × 0.7) - $50,000 = $160,000."

Remember that the 70% number is just a guideline, and not every real estate investor follows it strictly. Each home is different, and an investor may pay more for your home if it's in fairly good condition and located in a hot housing market. 

Can I refuse to sell my house to an investor?

As a property owner, you generally have the right to refuse offers from institutional investors, including cash home buyers — as long as your decision doesn’t violate anti-discrimination laws.

The Fair Housing Act prohibits discrimination against protected classes, such as race, religion, sex, familial status, or national origin, but it doesn’t extend protections to categories like investor status or geographical location.

Some sellers use deed restrictions to require that buyers live in the home, not rent it out. While this is legal, it must be set up carefully to avoid legal issues. If you’re considering this, it’s a good idea to talk to a lawyer or licensed real estate professional to ensure everything is done correctly.

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