If your home flooded in Houston during Hurricane Harvey and you decided to sell your home to investors, then you need to keep these things in mind.
In times of disaster, many people band together to help each other. A home investor can be someone that helps you but unfortunately there are many people posing as home investors that are looking to scam people for a quick profit. If you want to sell your house to investors then here are some tips to avoid being scammed.
Selling Your Flooded Home to Investors
Understanding what a legitimate and professional home investor looks like, you have to understand how an investor operates.
A home investor needs to know what a home can sell for if the home is fixed up and listed for sale. To find out what a home can sell for, an investor looks at comparable sales. Comparable sales are homes that are similar to the home an investor is thinking about buying. This means they would compare number of bedrooms, bathrooms, square footage, location and so on. A home investor also considers how long it took for a home to sell and compares it against the neighborhood’s average.
The investor will look at the repairs that are needed to get the house into fixed condition to sell at the highest price. Repairs could be something serious like structural or health issues to the more simple cosmetic issues. A structural or a health issue makes the home unlivable, and it needs to be taken care of. A flooded home is not a livable home because it can result in mold growth and possibly cause structural damage. If a home flooded along with others in the neighborhood, then the price of those homes will fall because potential buyers will fear future flooding and also question the quality of the repair work. It is hard to say what the new value of a home will be after a flood especially if there is not a comparable sale to compare against.
The investor will hire a contractor to fix the house. In a situation like Hurricane Harvey where a lot of homes flooded, contractors and materials will be in short supply. More so, reliable and professional contractors will be even harder to find. Many home owners may have to wait several months to get a contractor to fix their house.
Now that you know what a home investor looks for, here are several tips to look for when selling your flooded home to investors.
- Find out if they are local or not. If they are not local, red flags should go off.
- Find out their plan, are they planning to fix it and flip? Rent or sell to another investor? Bottom line, they should have a plan.
- Are they professional? Are they dressed for the job? Do they seem like they know what they are talking about?
- Do they have a boss or a regulatory association that they abide by? For example some investors are real estate agents and complaints can be reported to their broker or Texas Real Estate Commission (TREC). Full disclosure Michael “Fink” FInkelshteyn is a licensed real estate agent with Keller Williams Memorial.
- Ask for references such as realtors, title companies, contractors, or sellers that the investor has worked with.
- Find out what “weasel” clauses (if any) the investor is using. If they are using these clauses in the purchase agreement then chances are they don’t fully intend on closing the sale.
- Does the purchase agreement look legitimate? TREC has purchase agreements available to the public.
- Ask for proof of funds, or if a lender is involved, call the lender to verify.
In summary, the goal of the investor is to create a positive outcome for both the seller and investor. The home investor can provide a quick and easy sale that does not require the seller to pay for costly repairs. Selling your flooded home as-is avoids the hassle of dealing with contractors and allows you to walk away from the home and move on with your life.
If you would like to hear more about selling your flooded home to investors, then call 713-322-6645 or fill out the form below!