Selling to an Investor vs. Listing With an Agent
I buy houses for a living, and I still remind every seller that listing with an agent will probably get them the higher price. The real question is what you're trading for that price, and whether the trade is worth it to you.
Side by side
| Selling to me | Listing with an agent | |
|---|---|---|
| Price | Lower than a retail sale, because my offer has to leave room for repairs, holding costs and resale | Usually the highest price available, especially for a house in good shape |
| Timing | You choose the closing date | Depends on how long it takes to find a buyer and for that buyer to close |
| Repairs and prep | None; I buy in any condition, fire-damaged and unlivable houses included | Up to you, though condition shapes what buyers will pay |
| Showings | No open houses and no parade of buyers | Showings and open houses until the right buyer comes along |
| Clean-out | Leave behind whatever you don't want; I handle the cleanout after the sale | Whatever stays or goes is set by your contract with the buyer |
| Tenants | I buy with tenants still living there | Depends on the buyer you find |
| Commission | None when you sell directly to me | Set by the listing agreement you sign |
| Closing costs | Depends on the deal; sometimes I pay, sometimes the seller does | Seller's share depends on what the contract says |
| Who it suits | Houses that need a lot of work, or sellers who want it finished on a set date | Houses in good condition and sellers who can wait a few months |
When listing is the better move
If your house has been kept up and you're not in a rush, list it. A good agent will expose it to the most buyers, and competition is what pushes the price up. That's exactly why move-in-ready homes so seldom end up with me: my numbers can't compete with a retail buyer who wants to live there.
When selling to an investor makes sense
The math changes when a house needs major work, when you can't or won't put money into repairs, or when the calendar matters more than the last dollar. It also changes when the idea of months of showings, inspections and negotiations is something you'd pay to avoid. That's where most of the sellers I talk with land. I also buy condos, and I'll buy with tenants still living there, so a lease doesn't have to run out before you sell.
Some costs don't change
A few costs follow the sale no matter who buys. In New Jersey, the Realty Transfer Fee falls on the seller at recording, whether the buyer is me or a family with a mortgage. If you're curious how I build a number, this page walks through it, and the FAQ covers the questions I hear most.