As a company that buys houses in Houston, we wanted to discuss a very common question we get “How much will an investor pay for my house in Houston?”
An investor is usually going to be aiming to pay about 75% of what your house would be worth fully fixed up minus the cost to fix it up. This does however vary based on a number of very important factors we discuss below.
Why Don’t Investors Pay Full Price?
An investor invests in real estate because they hope to buy at a lower price and either sell at a higher price or rent out the property. Therefore, investors are motivated to find houses that are priced affordably for them to buy. Unlike a home-owner, an investor needs to make a profit to buy your house.
Why Do Investors Offer Different Prices?
The reason there can be a lot of variation between offers is that there are a lot of costs that need to be figured out and you probably won’t find two people that would come to the same numbers. These include:
- The After Repair Value of your house. This is done by looking at comparable houses in your area. This can easily vary because people may not be comparing your house to the same properties to come up with a price.
- The repair costs of your house. Investors have different contractors that charge different prices. There is no set price for work, just what the contractors charge for the job. While one contractor may charge $10,000 for the work, another may charge $20,000.
- The desired profit from the investor – There is a very wide range of profit that people are willing to make. Someone may be happy with a 10% profit, while someone else wouldn’t do it for less than a 30% profit.
- How conservative they are – if the investor feels uncomfortable with the repair costs, or the after repair value, they could offer a lower price to compensate in case they are wrong.
Should You Sell To An Investor?
It is important to realize that there is nothing that requires an investor to give you a fair price for your house or even be honest with you about anything. While it is unlikely they will try to scam you, issues tend to arise when the individual investors end up not actually having the money to buy your house and have to back out of the deal.
Sell To A Home Buyer Instead
Home buying companies like Brilliant Day Homes still have to make a profit but have the experience to be more accurate with the cost estimates, and keep a consistent profit percentage per deal. In addition, we have a 5-star rating online, a BBB accreditation, and are active in the Houston community. What that means is we have a good business reputation and want to keep it that way, unlike a random investor who you can’t complain about if they don’t keep their promises.