If you are a homeowner looking to sell your property fast, you may wonder what options you have. Typically your options include selling to a private party or a house flipper. Selling to a private party may necessitate a drawn-out closing process, while a house flipper may pay cash for your home, allowing you to sell it quickly.
The best option for you depends on how quickly you want to sell your house, your property’s age and condition, and its desirability on the home market. Learn why you should consider selling to a house flipper, how to recognize when is the best time to sell it to one, and what unique benefits selling to a house flipper may offer.
Preliminary Questions
If you’ve determined it’s time to sell your house but aren’t sure what avenue to take, ask yourself the following questions:
What is my home’s condition? Are there any signs of damage and wear? Do I have the time and budget to make all the required repairs and renovations?
• How old is my home? Am I willing to vet contractors and have it redesigned or remodeled before selling?
• What is my personal situation, and how does it affect my need to sell the house? Am I relocating, going through a divorce, downsizing, at risk of foreclosure, or unloading an inherited property?
• Is my home in a sought-after location? Are other properties in the area also selling and rebuilding?
These questions can help you determine if selling to a house flipper is right for you. For instance, if your home needs several repairs and you cannot afford the time, money, or effort to make them, selling to a house flipper can get you out of the property and earn a profit.
Additionally, if you face significant personal or financial challenges such as a divorce or foreclosure, selling to a house flipper can provide timely relief from a burdensome house payment.
Market for Home Sales in 2022
Experts believe that the current market is an ideal time to sell. This seller’s market is due to low inventory volume, high demand, and great interest rates. Housing demand is outpacing inventory, causing houses to stay on the real estate market for a short time before selling for more than the asking price.
Current estimates project that April 10 through 16, 2022, will see a peak in demand for housing, with the supply of available homes at the lowest point of the year.
According to a March 2020 study, more than 80% of prospective buyers prefer a turnkey house over one requiring repairs or renovations. The study also points out that, on average, 7 in 10 Millennial and Gen-X buyers would rather sacrifice home size than spend money on renovations. This data suggests a preference for buying a move-in-ready home over investing in a property with potential but necessary upfront costs.
Why Sell to a Home Flipper?
If your home is older, not move-in ready, and you don’t have the time, budget, or willingness to make repairs or remodel before selling, then a house flipper may be a good option.
A home flipper sees potential where prospective homeowners might see problems and additional expenses. Home flippers have the experience and knowledge to estimate your home’s current market value and are typically willing to buy it as-is and in cash.
The primary reason to sell to a home flipper is the speed and convenience they provide. You won’t have to have your home appraised, stage it for showing, or pay closing costs. In many cases, you can sell your home to a flipper in as little as one to two weeks.
Selling to a Home Flipper: How it Works
The average home flipper uses what the industry calls the 70% rule to determine an initial purchase price. The 70% rule suggests that a house flipper should pay approximately 70% of the After Repair Value (ARV) minus the money spent on repairs, renovations, improvements, and other upfront costs.
For example, suppose a home flipper is interested in a property with an AFV of $275,000. If the property needs $90,000 in repairs, the 70% rule suggests the house flipper should offer about $102,500.
- • 0.7 x $275,000 (ARV) = $192,500
- • ARV ($192,500) – Repair costs ($90,000) = $102,500 (suggested offer)
On average, selling your home on the open market takes around 60 days from listing to closing. Selling it to a house flipper cuts the average transaction time to less than 30 days, making it an excellent option for homeowners who want to offload their property.
If it’s Time to Sell Your Home, Trust Big State Construction
Big State Construction has over 15 years of experience providing real estate construction and renovation services in Houston and the Gulf Coast Region. Whether you are considering selling to a home flipper or on the open market, we can help increase your profit by suggesting repairs and renovations that will give you the best ROI.
If you need to sell your home or property quickly and efficiently, contact our team at (713) 574-8956 or email us at [email protected].