Should I Sell My Home to a Cash Investor? Pros and Cons to Selling Real Estate Before Listing on the Market

Should I Sell My Home to a Cash Investor? Pros and Cons to Selling Real Estate Before Listing on the Market

By Emilio DiSpirito, Realtor, Team Leader, National Real Estate Radio Show Host

Make no mistake, we are currently experiencing a sellers market in Rhode Island and across approximately 98% of the United States. Homes are pending in an average of about 70 days in Rhode Island and around 95% of original list price. Keep in mind buyers are enjoying this market as well because we have seen continued historically low mortgage rates for a few years now and it's more affordable to take out a 30 year mortgage and purchase in many cases.

Rhode Island Real Estate Market News

So, with homes pending in about 70 days on average and at 95% of list price where a Realtor will price your home, what makes more sense? Listing your home for sale or selling to a cash investor? Under which scenarios would work in the favor of a seller?

Will it benefit me to sell my home to a cash investor vs. listing with a Realtor or selling it as For Sale By Owner?

Here are a list of scenarios. Your situation may differ and that's ok. It's impossible to list all of the circumstances that arise that cause a home owner to sell and we can provide a tailored solution to your needs or even track the market over long period of times and send you updates, so when the time is ready, you are ready. Simply leave a comment on this blog or email me direct emiliodiv@gmail.com or send me a message here to ask your question or to set up a consultation.

Scenario 1: Our home has recently been updated. All of the bathrooms & kitchen have all been renovated in the last 5 years and family and friends always comment on how beautiful it is. The yard is well manicured and we've even had people tell us to contact them if we were thinking of selling.

List it or Cash Out? List it!! Your home is perfect for the real estate market. As a turn key property, your home will sell extremely fast and at a very high price during this market. Cash investors need to buy homes lower than fair market value in order to sell and turn a profit! Here are some suggestions to maximize your profit when listing with a Realtor!

• 4 Tips How You Can Win in a Sellers Market! (Blog)
• 7 Ways To Maximize Profit When Getting Ready to List My Property for Sale (Blog)
• Pre List Home Inspections (Video)

What are my closing costs as a seller? Watch the video! Call/Text 401-359-2338 for more information

Scenario 2: My home is very "lived in". It's been a great place to raise a family, but the kitchen is original to the home, the bathroom as well. The home has carpets throughout. Along the way, some work has been done such as a new furnace about 3 years ago, newer roof 10 years back and some other items to keep up with the structure and mechanical integrity of the home.


List it or Cash Out?  Cash Out!! In this circumstance you may want to cash out! Renovations such as kitchen and baths do play a large roll in where your home will appraise in value for a buyer who is financing. Often times, you will not recoup the money you have invested into your property when hiring contractors and making the improvements! Statistics show that buyers will ask for three dollars in credits off sales price for every one dollar in actual cost. On an average home, a kitchen could cost $20,000 to $30,000 to remodel while bathrooms could cost $15,000 to $20,000, depending on size and finishes. Aside from that, the cost to paint, install hardwood and ceramic flooring or something comparable could be another small fortune again that you most likely will not see the return on investment.

Selling your property in "as-is" condition at fair market value with a Realtor in this instance for $150,000 will net you between $120,000 and $130,000 after the property sells at the average market rate of 95%, your brokers fee, transfer taxes, closing cost and repair credits, legal fee for attorney to prepare your deed and review paperwork. It may take several showings to sell your property at this price. A cash investor, may purchase your property around this price and in "as-is" condition. They can often times close in a couple of days, week or when you need them to.

Scenario 3: I'm very handy and have a lot of connections to discounted materials like granite, kitchen cabinetry & flooring through friends or family. Some of my best friends are electricans, plumbers and contractors. My house is in need of a ton of repairs. Not only is it outdated, however the roof has 2 layers and is on its way out, windows are drafty and the electrical panel is fuse boxes and the wiring through my house is knob and tube. I've got money socked away and with the discounted rates on materials and labor I have access to, putting in work and money should not be an issue! 


List it or Cash Out? List it! But first, fix it!! By bringing your home up to today's buyers standards and offering a turn key and energy efficient home, you will be able to sell your property for top dollar when listing with a top producing real estate agent in Rhode Island or your area. 

Scenario 4: We've inherited a home through an estate sale. We have no need to hold on to this property and do not wish to pay for the upkeep and overhead of the house like taxes, mortgage, insurance, maintenance, etc. The property has some strong points to it, however a buyer will need to do a ton of work to get it today's standards and we just do not have the energy, time nor money to dump into the property for the risk of potentially not getting the return or strong enough return we would like. 

List it or Cash Out? Simple! Cash out!! Take advantage of getting a cash offer for your home to close in days and alleviate yourself from the headaches and financial burden this property may impose on you and your family. 

Your situations may vary and that is why you should always seek a professional opinion. Call me today to set up a consultation where we can look at bottom line numbers and discuss your goals to see which makes more sense. We can look into what you will net when selling on the market and time on market vs. selling the property to a cash investor and at the end of your meeting, you will have a tailored solution for your needs. Call/Text 401-359-2338 to get started or contact me direct at emiliodiv@gmail.com

Easily Get A Ball Park Number of Your Homes Value Here

Will Increased Housing Prices Bring More Renters To The Market?

Will Increased Housing Prices Force More Renters To The Market?

By Emilio DiSpirito Realor/iHeartradio Show Host "The Round Table Real Estate Simplified"

www.EmilioDiSpirito.com 401-359-2338 Email Emilio DiSpirito Here

January 2016

Housing Markets like San Francisco, San Jose, Seattle, New York City & Boston to name a few on a long list are right around where they were in 05', 06' & 07'... our last real estate market peak. With that said, the rest of the country should follow suit so long the US is not effected by international events like China's current housing and stock market crisis.

WATCH THE VIDEO BLOG HERE!! FIND OUT IF INCREASED REAL ESTATE VALUES FORCE MORE RENTERS TO THE MARKET!

Emilio DiSpirito Top Realtor in Rhode Island & Top Mortgage Professional Matthew Bates Discuss Major Real Estate Trends & Topics. SUBSCRIBE TO OUR YOUTUBE CHANNEL 

We've had 4 straight years of overall residential real estate price gains in the United States and specifically Rhode Island. The National Association of Realtors anticipates prices to gain 8%+ in 2016 over 2015 Nationwide. Recent & Current homeowners will enjoy a fine equity position while the ones who were underwater should be able to break even and sell without taking a loss or having to do a short sale, deed in lieu or foreclosure. Basically if your home was worth $300,000 in 2015 you might be looking at $324,000 in 2016. Call me at 401-359-2338 or click here for an accurate fair market value for your property. 

(Congress EXTENDED a provision that helps home owners short sale!)

Unlike the mid 2000's when we were on our way to the recession because of fraudulent activity with the banks lending out monies with no income verification to many folks who they know could not pay back the note, this market is supported by American's income and low interest rates. In fact the 40 year average rate is just around 8.5%... Anything under 8.5% is a very good rate to purchase a home!! We are currently for the most part around 4% and should remain under 6% throughout 2016. 

The job market has gained over 300,000 new jobs in December 2015 alone and our economy aside from the stock markets and oil prices taking a huge dive.. (which yes these may effect us and could cause us to reach this market apogee - We will discuss this later in the show) the overall housing market seems to be in check for the time being. 

Home prices are growing at a higher than expected rate because of lack of inventory involving new construction and existing homes listing for sale on the market. This is making it the most opportune time since 2007 to sell a home because due to low and sometimes no competition in neighborhoods, home sellers are getting a premium for their properties. Check out www.TrustTheDove,SmartHomePrice.com for your properties current market value. 

With increased home pricing and value will come higher rents. It's basic really, if you buy a property at a higher cost, you are going to hand that cost off to your tenants while maintaining a healthy profit margin. It's practical business sense really. 

(So WHY are 83% of Renters Who WANT to Own NOT Buying?)

Now lets mix the increased housing cost with an all time low for vacancies and no such thing as having to charge a "fair market rent" and you also get increased rents.. You may ask.. What is causing low vacancies? Millenials are starting to leave their parents homes and are becoming a healthy and vital part of our work force and economy, folks who were foreclosed on who are still unable to buy, lack of new construction being built, low inventory for existing home sales and empty nesters looking to downsize and rent have all come to the rental market in need of housing. Supply and demand has increased on rental units and will continue to, thus making it more affordable to purchase a new home, thus driving the number of first time or returning home buyers increasing the number of properties sold and home increase prices in 2016!!!

See how that all ties in!?

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Ok Lets Sum up!

"Will Higher Home Prices Bring More Renters To Buy?"

The answer is YES RENTS WILL CONTINUE TO RISE AND MORE RENTERS WILL COME TO THE MARKET TO BUY! & Here is why!

• Landlords paying more for properties will pass higher costs on to renters causing a shift in market rent pricing
• Landlords will also pad their profit margin to maintain a healthy position
• Lack of rental inventory and all time vacancy lows due to the number of people in need of rentals are increasing the cost of rent.. who are these people?
• Millennials are leaving parents homes and becoming a vital part of the work force
• Buyers who lost their home to foreclosure in the bust of 2008 and later - (By the way if this is you or someone you may know.. You might be able to buy.. Lets discuss!)
• Lack of New Construction for current buyers. Lack of existing homes on the market.
• & Empty nesters looking to downsize and get out of home ownership
• According to RentJungle.com the Average 2 bed rent in 2009 was $953 and as of Oct 2015 it was $1309!! That's a $356 increase aka 27.2% increase!! Where will that 2 bed apartment be at the end of 2016? $1400 per month? Why not own a 3 bed 1.5 bath for $1400 a month in a nice neighborhood?! 

Easily Start Your Home Buying Search www.MyDreamHomeNow.com

Consult a Top Producing Realtor in RI who will walk you through the home buying process 401-359-2338

Top 7 Ways Buyers Lose

COUNTDOWN: Top 7 Ways Buyers Lose

By Emilio DiSpirito - Realtor/Team Leader DiSpirito Team with HomeSmart Professionals

Radio Show Host - "The Round Table Real Estate Simplified" Produced by Real Estate Radio Network and aired on iHeartradio "WHJJ" and Newsradio 920 each Sunday at 10 am. 

Buying a home - possibly the largest purchase of your life...Why is it that so many buyers make the following mistakes costing them time, money and future stress!! 
MISTAKE #7! Waiving Home Inspections!
Home inspections are one of the most important parts of the process!! You need to make sure that the home does not fall apart, that the furnace does not die during the winter, plumbing doesn't leak and that your home is not infested with termites or carpenter ants to say the least! In the event there are major items in the home that need repair or service, you can ask for the seller to replace, fix or provide you with a credit that can save you thousands and a few gray hairs now and down the road! A good home inspector costs between $350 and $500. For our brave active military members and veterans, don't be afraid to ask inspector for a miltary discount! Make sure you ask your inspector if they cover septic, pest, radon, lead and well inspections. Many times they do not cover them all. You can ask them who they recommend. For Rhode Island home inspections, Mike Auger, owner of Patriot Home Inspections is very reasonable and has provided my clients with the best service.

MISTAKE #6! Buying A Home With A CESS POOL & NO SELLER CONCESSIONS!
Starting in January 1 of 2016, any home with a cess pool (roughly 25,000 in RI!) will be required to connect to sewer where available or to install a septic system upon transfer of property. When transferring property to immediate family you are exempt. However most sales are not to immediate family. If you are a buyer and the home you want has a cess pool, you will want to either ask seller to replace or to provide you with a credit. Have your agent ask the listing agent to get a quote for the system that specific property location calls for (high water table = higher prices $13,500 to $35,000 is what I have seen!). In the event you really really want the house and seller will not replace or will not agree on a credit, ask your real estate professional if that specific Rhode Island town is offering a "Waste water Assessment" to buyers. You can obtain a low interest loan from the local governments of 14 towns in Rhode Island to spread payments over time and make the install affordable. This information is always changing, so ask your Realtor for updated advice.

MISTAKE #5! Making Large Purchases When Buying A Home!
Furniture & Cars are the two biggest culprits when it comes to this category!! Mortgage companies give you financing depending on many requirements. One of those requirements is a certain "dept to income" ratio, aka DTI! Adding a monthly payment as low as $50 could absolutely disqualify you from affording the home of your dreams!!! Nothing worse than receiving a mortgage denial letter and having to wait several months or even years to buy... Not something I would suggest with historically low rates and reasonable home prices!

MISTAKE #4! Acting Too Fast - Waiting Too Long!
Buying the first home you see is not always the best idea! Shop around online for a while, have your agent educate you on location, home prices and what exactly you can get for your budget before diving in!! You may notice a home up the road that's been on the market with a bit of a bigger yard on that dead end with granite and stainless kitchen you have wanted in the same price range! On the other hand, waiting too long to make a move will leave you with missed opportunities! Homes that are priced right and that are appealing are selling extremely fast. Sometimes before listed or resulting in bid wars where sellers win and buyer pay more to play!

MISTAKE #3! Asking For Things After The "Hand Shake"!
Nothing can hurt a deal more than asking for additional items or concessions after a deal has been made. There are only two times in a transaction after contract has been signed where it is ok to do this and it's after home inspections if something needs to be repaired or replaced and if a home does not appraise it's ok to ask for seller to match appraised value.

MISTAKE #2! Choosing Your Lender Based On The Fact They House Your Checking Account!
More times than none, buyers will go to their personal banker who takes care of their checking & savings accounts to write their loan. Don't get me wrong because there are certain situations where banks can hep buyers with "portfolio" and certain "high risk" mortgages that others will not and there are a select few banks that have done really well by buyers in my estimation (while others told me "complaint department is closed"... or "good luck with that!"... and my favorite - "We have clear to close and the home appraised!..... (1 day later)..Banker says "I never said that!"). Me personally, I'd rather work directly with someone who only does mortgages. Not to mention, how well do you think it goes over when you find the home of your dreams on Tuesday at 5:00 pm and ask your bank for a pre approval letter to only hear the options menu and hours of operation? Working with a mortgage broker who works with multiple banks can really dig down deep to find you a great deal. More importantly mortgages ARE their business and the best brokers are available nights and weekends! My clients have strongly recommended Daniel Giroux with A Plus Mortgage.

MISTAKE #1! Investing Without Professional Education!
The BIGGEST mistake many buyers are found guilty of is buying a home without professional education!! Many buyers do not realize that they can hire a buyers agent for free! That's right!! Often times the listing agent will compensate the buyers agent upon a successful sale. Whether you decide to use a Designated Buyers Representative or you wish to use the Listing Agent to act as Transaction Coordinator or Neutral Dual Facilitator , you want to ensure you at least know all of the steps of the process to take! If this is your first home, we strongly suggest you use a Designated Client Representative who can not only negotiate a deal on your behalf but more importantly can walk you through the 180+ steps of the buying process to ensure a successful, safe & smooth transaction!

Tune in every Sunday to "The Round Table - Real Estate Simplified" to get advice from the states top Real Estate Agents, Attorneys, Mortgage Brokers, Home Inspections, Contractors, Financial Planners, Accountants and many more! Information that is vital to a successful real estate transaction! iHeartradio "WHJJ" & Newsradio 920!

To consult with a full time & top producing Realtor in Rhode Island or for recommendations for agents anywhere in the United States & Territories, consult Real Estate Agent Emilio DiSpirito 401-359-2338. 

To see how much your home is worth please visit www.MyDreamHomeNow.com/sell

To view homes for sale in Rhode Island please visit www.MyDreamHomeNow.com