2 Things You MUST Know Before Selling to an Investor

 

You’ve probably seen the street signs or Facebook ads, or even received a letter in the mail. There are people and companies who want to buy your house! Maybe you’ve wondered what you need to know before you sign a contract with one of these investors or professional house buyers. There are two critical aspects of the contract you must watch for.

 

Any ethical, professional home buyer or investor will use a TREC (Texas Real Estate Commission) contract. It’s a 10-page contract also used by all realtors, designed to protect BOTH buyers and sellers. It’s available online, as are explanations for what each section means. When someone presents you a different contract, you should wonder what they are hiding, and why they aren’t using the TREC contract that is so readily available. Be very afraid.

 

On Page 8 of the TREC contract is Section 23, titled “Termination Option”.  This is typically used by retail (traditional) home buyers to allow a detailed home inspection, after which repairs may be requested. If the seller doesn’t agree to the repairs within the time period, the buyer may terminate the contract.

 

However, an investor who buys a house “as is” doesn’t need a detailed home inspection, and is usually quite comfortable evaluating a house during a short walk-through, and making an offer on the spot.  There is no “termination option” needed. The reason many professional home buyers want a termination option is because they don’t actually plan to buy the house – signing the contract simply gives them the right to re-sell the house to somebody else. That termination option allows them to opt out of the deal at the end of that period if they can’t find another buyer.

 

While this strategy is certainly legal, it’s often not fully explained to the seller. Selling to an investor can be a great option and really help you out a lot, but know your contract and work with an honest home buyer who does business with integrity!

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