House flipping has become increasingly popular in recent years – especially in healthy real estate markets. A house flipper may or may not be a real estate agent. They are often people who make their living from buying “unique fixer-upper opportunities,” for a low price (in cash), making repairs and upgrades and then selling the homes in “move-in” condition and at a profit. Everyone can benefit.
If you need to put your home on the market, should you consider selling it to a house flipper? It depends on a number of factors. It’s also important to understand the process.
Are considerable repairs and renovations needed?
Home sellers can benefit by going to a house flipper rather than placing their house on the market if they would need to make extensive, costly repairs and upgrades to find a buyer – or even to get a real estate agent to list it. Most people (80% according to a Coldwell Banker survey) would prefer to buy a “turnkey” home that doesn’t require work. Many people who need to sell an elderly parent’s home when they move to an assisted living facility or pass away turn to house flippers.
Do you need to move soon?
If you got a job outside the area, you may not have time to deal with the traditional home sale process, and you can’t afford to keep the house and pay rent in your new location. A house flipper might be the best solution. By selling to a house flipper, you could close on the sale within a couple of weeks.
Make sure you’re getting a fair deal
This is where knowing something about house flipping is important – like the “flipper pricing model.” Typically, flippers will offer up to a maximum of 70% of the home’s after-repair value (ARV), not counting the cost of repairs. That means you’ll start off by getting at least 30% less than the home could be worth – and even less than that if a lot of work needs to be done.
There are a lot of businesses out there that advertise that they’ll pay cash for your home, no matter what condition it’s in. Some house flippers, however, are individual real estate investors. It’s always crucial to make sure that you’re partnering with someone who is legitimate and has a solid reputation in your area. It’s also wise to have experienced legal guidance.