How Much Will an Investor Pay for My House? Here’s What to Expect

How much investors pay | How it works | Pros and cons | Negotiating | Alternatives | FAQ

Selling to a real estate investor is an easy way to sell your home quickly for cash. You won’t make as much money, but using an investor might make sense if you need to sell on a tight timeline, have a house requiring significant repairs, or can't list traditionally.

Property investors make money by purchasing at below-market value, repairing, and selling on the open market for a profit. Many investors pay 70-80% of your home’s after-repair value (ARV).

You have options if you’re considering selling to a real estate investor, including:

• iBuyers: Online companies that pay cash for homes and offer programs like buy-before-you-sell loans
• National cash buying networks: Companies that buy homes for cash and either repair or wholesale to make a profit
• Local fix-and-flip investors: Independent house flippers that buy fixer-uppers and make repairs to sell them on the open market

It's best to compare offers from different types of investors to ensure you’re getting the best deal and the most favorable terms.

Ready to sell quickly and hassle-free? With Clever Offers, you can compare cash offers from trusted buyers easily. Either get an instant cash offer for up to 100% of your home’s value, or explore multiple offers to maximize your sales price. Fill out a quick form to get matched with cash buyers today!

How much investors pay for houses

Most investors pay 70-80% of a home's ARV (what it's worth after being fixed up). So, a home with an ARV of $300,000 might fetch an offer of up to $240,000, for example.

To determine the ARV, investors calculate the current value of the house and add in repair costs. The formula for calculating ARV breaks down like this:

ARV = Current Home Value + Necessary Repairs

Here’s what the ARV would be on a home valued at $225,000 needing $75,000 in repairs:

ARV = $225,000 + $75,000
ARV = $300,000

Holding costs are monthly expenses required to own the property until selling — also affect how much an investor pays for your home. These costs can include short-term financing costs, like bridge loans, fix-and-flip loans, or hard money loans. They may also include:

• Homeowner’s or landlord's insurance
• Utilities and maintenance
• HOA fees or property management fees

What an investor might earn

This table breaks down what an investor might pay for a house expected to sell for $400,000 after repairs, with an estimated $50,000 in repairs. The investor could earn an estimated $56,000 profit if they purchase the house for $280,000.

Why don’t investors pay full price?

House flippers don’t pay fair-market value because they typically expect a 10-20% profit margin when the house goes to market.

To make more money later, fix-to-flip investors want to buy houses with a higher ARV to create built-in equity and have more wiggle room on price once the property goes to market.

Flipping homes also comes with inherent risks, like unexpected repair expenses or rising monthly costs from a slow market, so many real estate investors also make lower offers to build some cushion into the budget.

Types of real estate investors who pay cash for houses

House flippers

Fix-to-flip investors, or house flippers, take an HGTV-style approach to real estate investment: They purchase below market value and resell as soon as possible.

Most flippers look for homes that only require cosmetic upgrades, such as bathroom and kitchen refreshes that require no structural repair. After installing updates, they take the home to market in an attempt to make a profit.

iBuyers

iBuyers are web-based real estate investors focusing on flipping opportunities, wholesaling to a house flipper, or buy-now-sell-later programs for homeowners.

Working with an iBuyer might net sellers more money because these companies typically have a wider reach than average house flippers. They also offer tech-focused platforms that simplify the home-selling process.

Buy-and-hold investors

Buy-and-hold investors typically care less about potential resale in the current market and more about the current rental market. These investors aim to buy and fix properties to use as rental properties and accrue passive income until the time is right to sell.

When the market swings toward the investors’ favor, buy-and-hold investors list the home to make a profit on the property.

Real estate wholesalers

Wholesalers enter contracts to buy properties and then sell those contracts to property developers or other investors looking to flip homes.

Since much of the wholesaling strategy relies on transferring sales contracts to another investor, wholesalers typically offer less money than other investors to profit from the deal.

Your best bet: Compare options

Working with a real estate investor is an option for a quick, convenient sale.

Contact a trusted real estate professional to determine your home’s fair market value. Then, get offers from several investors before committing.

Free services like Clever Offers provide instant cash offers of up to 100% of your home’s value. For homeowners looking to maximize sale price, Clever’s 7-Day Sold program connects you with competitive cash buyers from the open market in just one week. Fill out this quick form to get started today!

How does selling to an investor work?

Step 1: Find investors who meet your criteria

Start by researching real estate investors and iBuyers in your area. If you aren’t sure where to begin, comparing cash offers from investors through Clever Offers is a great place to start.

Step 2: Let them know you want to sell

Contact your potential investor to tell them a bit about your home and that you want to sell it. If you choose to work with an iBuyer, this process involves filling out a form on the company’s website.

During this initial contact, the investor may make an upfront offer on your home, but that offer could change before closing.

Step 3: Schedule a first meeting or consultation

After contacting an investor, you’ll schedule a consultation to give them more information about your home, discuss their process, and set up a home inspection.

This meeting is a good opportunity to ask questions about how they calculate property value and what they look for regarding repairs.

Step 4: Undergo a property inspection

Shortly after the first meeting, your investor will schedule a property inspection — local flippers may inspect the home on their own, while larger companies often use third parties.

Most companies don’t require you to be present for the inspection. But it’s better if you are there for the walkthrough to ask questions and get a feel for potential repairs.

Step 5: Receive a final offer and negotiation

Once the home inspection is complete, the real estate investor will adjust their offer based on potential property improvements.

In some cases, like if you use an iBuyer, this final offer will be take-it-or-leave-it. But you may have room for negotiation if the investor’s repair quote is overinflated or you have a better offer to leverage.

Step 6: Title review, inspection, and other due diligence

During this phase, the investor will present you with a sales contract for your home, and you will have time to review it before closing.

They will also pull your property title to ensure you own your property and there are no issues that would prevent the deal from happening.

It’s essential to consult a real estate professional or attorney to review these documents to make sure the offer is legit before signing the contract.

Step 7: Financing and closing

After you agree to the offer, you’ll close the deal and receive payment for your home. This process often moves quickly because most investors pay cash for homes.

If your investor needs financing, there may be a delay until they secure funds.

Step 8: Transfer of ownership

Once you close the deal, you’ll take legal steps to prepare and transfer your deed to the investor. You may also need to pay transfer taxes and fees if the investor didn’t agree to pay them during the cash deal.

After the deed transfers, the investor assumes full ownership of your property.

Pros and cons of selling to investors

Pros

✅ Homes bought as-is. You don’t need to make repairs before selling or prepare the home for showings.

✅ You can close quickly on your sale. Many home investors want to move quickly through the sale process and can close in as few as one to two weeks.

✅ Can provide financial relief. House flippers often work with banks to clear up financial problems like liens, delinquent mortgage payments, homes facing foreclosure, or other complicated financial problems.

✅ No contingencies. You won’t need to worry about your buyer securing financing, making repairs to close, or getting a home appraisal before selling to an investor.

✅ No commission or closing costs. Since selling to an investor is a cash deal without realtor guidance, there's no commission. And most investor sales have no closing costs or extra fees for selling to them.

Cons

❌ You will earn less. Fix-to-flip investors and wholesalers only offer around 70-80% of ARV to make a profit, which is significantly lower than the fair market value.

❌ Little room for negotiation. Most investors make take-it-or-leave-it offers, so you won’t have much wiggle room if you want to negotiate a better price.

❌ Not all cash buyers are reputable. While most investors who buy homes for cash run legit businesses, some have poor reputations with customers. Researching your local investors before agreeing to work with them is essential to ensure they are trustworthy.

❌ You may still need a home inspection. Most investors will walk through your property to inspect for potential repairs and adjust their offer. This inspection could impact the final price of the cash deal.

Negotiating price with investors

Most cash deals have minimal room for negotiation (especially if you work with an iBuyer), but you may get them to budge on price if you negotiate well. Here are some tips for getting the best deal on your sale:

1. Understand your home’s market value

Researching comparable properties in your area, getting a comparative market analysis from a trusted realtor, or hiring a home appraiser will help you understand your home’s value.

This knowledge will help you understand how investor quotes stack up to the actual value and give you leverage when discussing price.

2. Talk to multiple investors

Playing the field allows you to find the best deal on your cash sale. Be sure to get quotes from local investors, iBuyers, and wholesalers in your area to determine which investor is right for you.

Working with Clever Offers can help you compare multiple investor offers quickly to streamline the selling process.

3. Highlight your property’s strengths

When talking with your investor, be sure to mention your home's unique features, such as location, interesting architectural features, or recent upgrades.

4. Be flexible

You may be able to handle minor repairs or cover expenses like closing costs to sweeten the deal for your investor. This flexibility could result in a higher offer.

5. Provide a pre-inspection report

Requesting a professional home inspection before you look for an investor may pay off in the long run.

A pre-inspection report shows transparency as you enter a deal, gives you a list of potential repairs to compare with your investor’s post-inspection analysis, and may result in better buyer offers.

6. Protect your interests

Before you enter into a deal with an investor, ask for proof of funds or request earnest money on the deal. This strategy can keep them from backing out of the agreement and hold them to their initial offer.

7. Shop around and leverage offers

Interviewing multiple investors is essential to maximizing your profit. Looking into multiple companies will help you understand who offers the best deal regarding additional fees, closing timelines, contingencies, and other components beyond price.

Sometimes an investor with lower fees or a faster closing timeline may provide better overall value, even if their offer price is lower.

Alternative: Connect with a local low-commission agent instead

Working with a knowledgeable full-service realtor is your best bet if you want to make the most on your home while receiving exceptional service. And when you choose a low commission realtor, you’ll make even more on your sale.

The downside: While you may save on commission fees, the process might take longer than selling to a cash buyer. Consider this route only if you believe your home can sell through traditional methods and you’re not facing any circumstances that require a quick sale.

The bottom line

Selling to a real estate investor is ideal for someone who wants to sell an inherited property, needs a quick sale, prefers to avoid the stress of real estate deals, or if you:

• Need to sell quickly
• Don’t want to make repairs
• Aren’t interested in making maximum profit

But if you want to make the most on what’s most likely your biggest asset, you should consider a low-commission realtor or use a service like Clever Offers, which matches you with fully-vetted cash buyers who place bids on your home.

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