Got an offer to buy my Rental. Selling cost and advice please.

5 Replies

Hi everyone. I've been getting solicited by other real estate investors looking to buy my rental off of me. I am not exactly looking to sell but may be open to it if the price is right. I've avoided these types of offers because I figure they are trying to get a "deal" and not nearly give me what my property is worth. That being said, if I was to sell to an investor willing to pay cash, I'm guessing that I could avoid the agents and not nearly have as much expense during the selling process. So my question are:

1. Which expenses would I be saving? Would it be just the agents fees or are there other closing costs/fees I could cut out with this type of transaction? 

2. Do you think it would be wise to sell to an investor looking for a deal who would be less expensive to sell to and likely more willing to cover certain costs vs. the price I could get selling through my agent? 

You can generally get more by going to market. You'll have savings by not involving an agent, but usually not enough to make up for the discount you're giving to the seller. 

If you do accept one of these offers, just get them to pay all closing costs. Have the contract read exactly what you're to receive, "net" of any fees. If your sales price is $1M, you're to receive $1M at closing, net of all closing costs and fees. 

Expect to receive lowball offers way below what a non-desperate seller will take.   

Originally posted by @Corey G. :

Hi everyone. I've been getting solicited by other real estate investors looking to buy my rental off of me. I am not exactly looking to sell but may be open to it if the price is right. I've avoided these types of offers because I figure they are trying to get a "deal" and not nearly give me what my property is worth. That being said, if I was to sell to an investor willing to pay cash, I'm guessing that I could avoid the agents and not nearly have as much expense during the selling process. So my question are:

1. Which expenses would I be saving? Would it be just the agents fees or are there other closing costs/fees I could cut out with this type of transaction? 

2. Do you think it would be wise to sell to an investor looking for a deal who would be less expensive to sell to and likely more willing to cover certain costs vs. the price I could get selling through my agent? 

 First, if it is cash flowing and not a hassle and you don't need the money right now, I wouldn't sell.

Second, you would look for three properties that are within half a mile of the property that have sold in the last 3 months and have basically the same floor plan and vintage and come up with "comps". Properties currently for sale you'd look at Days on Market. If houses are taking over 90 days to sell they are probably over priced.

Third, you might offer the property for sale to the tenants and get a better deal.

Fourth, you could have an appraisal done and get the opinion of an appraiser. Three different real estate agents will give you three different values and three different appraisers will give you three different values. Keep in mind that for all of them it is an "opinion" of what the house is worth at that time.

Fifth, I don't pay cash for houses (I simply take over the financing and give whatever equity to the seller) so I don't have a horse in this race. But, I've sold plenty of houses with no real estate agents involved and it isn't hard. Call a title company, open escrow and they do all of the heavy lifting anyway.

Originally posted by @Mike M. :
Originally posted by @Corey G.:

Hi everyone. I've been getting solicited by other real estate investors looking to buy my rental off of me. I am not exactly looking to sell but may be open to it if the price is right. I've avoided these types of offers because I figure they are trying to get a "deal" and not nearly give me what my property is worth. That being said, if I was to sell to an investor willing to pay cash, I'm guessing that I could avoid the agents and not nearly have as much expense during the selling process. So my question are:

1. Which expenses would I be saving? Would it be just the agents fees or are there other closing costs/fees I could cut out with this type of transaction? 

2. Do you think it would be wise to sell to an investor looking for a deal who would be less expensive to sell to and likely more willing to cover certain costs vs. the price I could get selling through my agent? 

 First, if it is cash flowing and not a hassle and you don't need the money right now, I wouldn't sell.

Second, you would look for three properties that are within half a mile of the property that have sold in the last 3 months and have basically the same floor plan and vintage and come up with "comps". Properties currently for sale you'd look at Days on Market. If houses are taking over 90 days to sell they are probably over priced.

Third, you might offer the property for sale to the tenants and get a better deal.

Fourth, you could have an appraisal done and get the opinion of an appraiser. Three different real estate agents will give you three different values and three different appraisers will give you three different values. Keep in mind that for all of them it is an "opinion" of what the house is worth at that time.

Fifth, I don't pay cash for houses (I simply take over the financing and give whatever equity to the seller) so I don't have a horse in this race. But, I've sold plenty of houses with no real estate agents involved and it isn't hard. Call a title company, open escrow and they do all of the heavy lifting anyway.

 Thanks for the info Mike. Since you have experience selling without an agent, if I was to sell myself, approximately how much does it save? I was figuring about 6% in agent fees but since I haven't done it before, is that accurate? 

Originally posted by @Corey G. :
Originally posted by @Mike M.:
Originally posted by @Corey G.:

Hi everyone. I've been getting solicited by other real estate investors looking to buy my rental off of me. I am not exactly looking to sell but may be open to it if the price is right. I've avoided these types of offers because I figure they are trying to get a "deal" and not nearly give me what my property is worth. That being said, if I was to sell to an investor willing to pay cash, I'm guessing that I could avoid the agents and not nearly have as much expense during the selling process. So my question are:

1. Which expenses would I be saving? Would it be just the agents fees or are there other closing costs/fees I could cut out with this type of transaction? 

2. Do you think it would be wise to sell to an investor looking for a deal who would be less expensive to sell to and likely more willing to cover certain costs vs. the price I could get selling through my agent? 

 First, if it is cash flowing and not a hassle and you don't need the money right now, I wouldn't sell.

Second, you would look for three properties that are within half a mile of the property that have sold in the last 3 months and have basically the same floor plan and vintage and come up with "comps". Properties currently for sale you'd look at Days on Market. If houses are taking over 90 days to sell they are probably over priced.

Third, you might offer the property for sale to the tenants and get a better deal.

Fourth, you could have an appraisal done and get the opinion of an appraiser. Three different real estate agents will give you three different values and three different appraisers will give you three different values. Keep in mind that for all of them it is an "opinion" of what the house is worth at that time.

Fifth, I don't pay cash for houses (I simply take over the financing and give whatever equity to the seller) so I don't have a horse in this race. But, I've sold plenty of houses with no real estate agents involved and it isn't hard. Call a title company, open escrow and they do all of the heavy lifting anyway.

 Thanks for the info Mike. Since you have experience selling without an agent, if I was to sell myself, approximately how much does it save? I was figuring about 6% in agent fees but since I haven't done it before, is that accurate? 

 That is correct, 6% provided you are selling for the same amount that an agent can get you or even more than an agent can get. A lot of agents will over promise on the selling price and then when it doesn't sell tell you to reduce the price. That is easier for them than actually marketing the property. If you are willing to market the property you can do as well or better than an agent. Have someone who doesn't normally visit the property walk through with you and give you a list of things they would want taken care of before they bought the place. You will never "see" the things other people see.

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