When you sell your property, you may sell it to an individual or a family who are looking to move in and make it their home. But not all buyers are looking for their forever home; some are just looking for their next investment, so it’s important to understand the process and implications of selling to a real estate investor.
A recent article from realtor.com answered some common questions homeowners have about selling to a real estate investor, including:
- How does selling to an investor impact a market? By definition, when you sell to an investor, they’re not planning on using your home as a primary residence. That means they either have plans to flip the home and sell at a profit, or use it as a rental, which can lower available inventory in the market — both of which can drive up prices and make it harder for individual buyers (particularly first-time buyers) to find and buy homes.
- How do you know if an offer is from an investor? You won’t always know if an offer is coming from an investor. That being said, there are certain signs you can look for that sometimes point to an investor’s involvement, including a buyer approaching you with an offer before you list your home; getting an all-cash offer that’s significantly below your asking price; or getting an offer with an LLC instead of a person’s name.
- Are there any ways to avoid selling to an investor? Avoiding any type of buyer can potentially lead to a lawsuit. If a buyer is qualified to buy your home, be careful not to decline an offer based upon who they are. That said, if you truly want to ensure your home is not sold to an investor, speak to a lawyer for help establishing a deed restriction, which will limit what your buyer can do with the property.