Your home is an investment in which you also happen to live. Since real estate investors / private home buyers aren’t buying your home to live in it, you may wonder, “is selling to a real estate investor worth it, and am I being offered the best price?” What are you saving versus otherwise spending?
Real estate investors or private home buyers buy your home unrenovated, unpainted, and even uncared for. The ease associated with the transaction makes selling to private home buyers a draw for many people.
There’s only one way to know how to make sure you’re getting the best price from a real estate investor, and it means you have to know your base price first.
Before meeting with a real estate investor or private home buyer, take ten minutes to crunch your numbers around the following suggested instances, to be better informed.
The decision to not renovate, not allocate your valuable time to selling your house in a traditional way, and lessening your stress becomes a monetary trade-off that will all factor into the value of your property. First, find a comparable sales number average for renovated homes of a similar size and age in your neighbourhood.
Factors that will affect the price of a property:
1) Renovating versus not renovating.
The more money paid to contractors and banking interest for renovation loans, the more money a seller expects to gain back.
Family and individual buyers will almost always aesthetically gravitate to buying a home with recent upgrades and fresh renovations, so those renovations become a valuable sales asset. If you save the costs of renovations, those savings must be subtracted from the eventual final sale price.
Subtract renovation costs from your asking price.
2) Your time must be factored in as money.
More and more, the demands on our time keep us from living a quality of life we wish we were living. A big drain on our time is the readying of a house for its sale.
Choosing to do your own renovations means you aren’t spending that time doing other things that may have greater personal value to you or other family members.
Renovations can take a very long time; in fact, the time can increase to cause us even more money and more stress. Once the house is ready for its sale, open houses require our time, both in the preparation and time spent elsewhere while they occur.
Subtract time costs from your asking price.
3) Keeping it stress-free is invaluable.
We are all different and have naturally varying degrees of tolerance for life changes.
If you are determined to keep your life as stress-free as possible during the sale of your house, the energy of physical and emotional effort must be transferred to someone else.
Subtract a cost for convenience.
4) Not paying commissions, photography, or video costs.
The traditional photography, video, and real estate commissions not paid (commissions are typically 4 – 5%) are savings that real estate investors are aware of.
Total the following figures and subtract the result from your initial neighbourhood comparable sales number average to have a reasonable valuation of your home:
- Renovation costs that would have been; our tendency is to initially guess renovation costs low. Add 25% to your researched and educated-guess costs.
- General cost increases; since the beginning of the pandemic, prices have gone up. Add an additional 15 – 20 %
- Probable structural or safety renovations beyond those first anticipated are taken into account by real estate investors or private home buyers. Add a further 10 – 30%.
- The time that you’d have spent planning renovations, acting as the contractor, and preparing your home’s interior and exterior landscaping. Add a cost equivalent to those hours.
- A quick house sale translates into monetary earnings; you can do more now with immediate money for better future, stress-free decisions. Add a number that represents immediate interest earned.
Now that you have a proper valuation of your home, don’t forget to negotiate; your home or property, even without renovations, has much worth as an investment.