Investor Vs Agent: 3 Simple Steps to Help You Decide The Best Option

Step 1: Determine How Fast You Need To Sell Your House

Most of us have been through the traditional home buying process before. A Real Estate Agent finds us a house that we like, we get approved for financing, have our inspections and appraisals performed, and then we enter into negotiations with the seller. The whole process usually takes anywhere from 30 - 45 days, and can be both exciting and stressful at the same time. For most people, this is just part of the process, and it's to be expected. In exchange for a seller's time, they'll also get the highest offer for their house since there is exposure to many potential sellers.

What if you need to sell your house faster than a traditional sale?

A Real Estate Investor is able to buy houses faster than a traditional sale for a few reasons:

• Investors work with you directly - there are no Agents included in the transaction. This reduces the delays in communication between the buyer and the seller.
• Investors are Self-Financed - Most investors purchase houses with their own funds. This means that they typically don't require approval from a bank for their purchases.

Step 2: Determine What Repairs Your House Needs

When buyers are looking for houses in older neighborhoods, most expect that they'll have to make some updates here and there. Mortgage companies are usually OK with this too, as long as everything is in working order. If your house is in generally good repair but needs a few updates, you shouldn't have any trouble selling it with a Real Estate Agent for close to market value.

What if your house does need some repairs and remodeling?

Real Estate Investors buy houses in various conditions. They specialize in buying houses "as-is", with the full understanding that there's a possibility that the house may have some major issues.

Step 3: Know the Actual Costs Associated with Selling Your House

A few of the costs associated with a traditional real estate sale are listed here:

• Commissions - A Real Estate Agent's job is to work hard to get you the highest possible offer for your house. In doing this, they earn a commission when they have successfully helped you sell your house. Most residential real estate transactions include a 6% commission, with 3% going to the buyer's agent, and 3% going to the seller's agent.
• Closing Costs - It's very common for the seller to pay for the closing costs in a real estate transaction. Closing costs typically amount to 2% of the sales price of your house. Most buyers will also ask the seller to include a Home Warranty policy for 1 year, which usually costs around $600.
• Negotiations - A good buyer's agent will try to negotiate a discount for their buyer. The negotiations could include allowances for things such as flooring, a new roof, or HVAC replacement.
• Soft costs - During the time that your house is listed for sale with a Real Estate Agent, you'll need to continue to make monthly payments for things like your mortgage, insurance, utilities and taxes. The longer it takes your house to sell, the longer you'll need to pay for these types of costs.

What costs are involved with selling to an investor?

Investors buy houses below market value so that they are able to spend the time and money necessary to repair and remodel the house, then sell it for a profit. In exchange for a discounted sales price for your house, investors don't charge any commissions and they pay all normal closing costs.

Both a Real Estate Agent and a Real Estate Investor have their place in the Real Estate market, and now you're armed with some knowledge to help you determine which path works the best for your situation. No matter which you decide to use, always do plenty of research, and ask for references of anybody that you decide to do business with.