When offered cash for your home, there are a few components that go into the planning of that offer. It’s so important as a homeowner to be completely aware of what goes on behind the scenes so you can be guaranteed a fair deal. Here I will explain how an investor comes up with a cash offer for your home, and how you can get the best offer possible. While the investor making the offer is doing so to make a profit, this profit should ideally be a fair amount which works for everyone who is involved with the deal.
To create the offer, the first thing an investor needs to do is to find out based on the recent sales in the area how much they could sell your house if everything in the house was updated, from the kitchen, to the electrical, and the plumbing. This is the maximum price anyone would be willing to pay when the house is listed by a realtor. The realtor’s commission, along with all the closing costs, is about 10% of a sales price. Normally an investor has to pay an interest to borrow the money and that is between 12-15% per year and paid during the hold time (from time the house is purchased to the time it is sold). So that along with all the other holding costs could be about 5%. So if the investor fixes the house and sells it what we call a flip, they pay 15% of the maximum sale price for fees and other carrying costs. Ultimately, they would want to make 10% profit for their work and risking their capital, so at this point the maximum they would pay for the house would be 75% of the maximum price that house would bring. Through the walk through they would get a good understanding of the costs associated with repairs inside and outside of the house. From there, they would budget for those repair costs.
Some investors act as a middle man by selling the contract to other investors and taking a finder’s fee which is subtracted from the maximum offer that they would make. But we at Metro Realty Holdings will purchase the house ourselves to repair and resell, or keep as a rental. You can take comfort in knowing that your home will be in good hands, and our representatives are a true reflection of our high standards and conduct.
Give us a call at (248)487-8700 so we can develop an all cash offer for you.
Watertower Address
PO Box 250993, West Bloomfield, MI, 48823
Discover off-market investment opportunities for cash buyers. We simplify your investment journey with our exclusive off-market deals at a discounted price. Opinions of value / rents are given as a courtesy and no guarantees are expressed or implied. Our properties move fast so contact us quickly if there is a property you want to purchase.
