Should You Sell to an Investor?

Should you sell to an investor? Talk about that as well as a retired teacher wants to downsize. Cupertino House of the Week, Willa Glenn House of the Week, Luxury Home of the Week, and the 12th Bay Area. Housing stats, let's get moving. All right, should you sell to an investor? So it really depends on what you want, right? If you're okay walking away with a little less money than you thought, an investor might be a good way for you to go. There's less hassle, there's less preparation, there's less turmoil, so that's a trade-off, right? So it really depends on what your house is worth and what it's worth to you. Is your house worth a million dollars? What could you do to make sure that it's worth a million dollars? Put it on the open market, get it listed on the ML and sold correctly. There's some stuff that you have to do to it. Now, if you don't want to get it staged, you don't want to do the repairs, you don't want people coming through your house and you have to deal with your pets, I completely understand. This is an option. However, is it the best option? That's something you have to ask yourself. There's ads all over the place on social, on Google, on everything saying, we'll buy your house, hassle-free, no realtor fees, all that stuff that comes at a cost. That cost is the investor is there to make money. They're there to do this as a business. So when you're thinking about this, typically when I talk to investors, because if I have a house that's not in the greatest condition and the people don't want to deal with it, I am going to reach out to my investor list and say, Hey, this house is available for sale. If you want to put an offer down and typically what I get is 60 cents on the dollar. So if your house is worth a million dollars, you're looking at $600,000 because a lot of those people are what we call bird dogs. So they'll get into contracting and then they'll sign it to another investor and they'll do the takeover and either fix it up and flip it or hold it long term or sell it on the investor market. Now, is it worth your time? Again, that's up to you. I can't tell you yes or no. If you do understand that you're going to be at 60, 65 cents on the dollar. What happens sometimes you're out of state and your parents pass away and you have something that's in Florida or something that you just have to get rid of, or maybe it burnt down, or there's some major problems that you just don't want to deal with, like a foundation issue or the kitchen caught fire or what have you. And there's just, I just don't want to deal with it. That's a great option for an investor. There are buyers out there that will do it too, but typically what will happen is you put it on market and then the investor group will come through. Typically they have their financing all taken up because it's a machine, right? They have people that will close in 10, 15, 20 days, depending on who it goes to and who's buying it. And you can sell it to the institutional investors like BlackRock and Vanguard. Again, they're going to give you a little bit more because there's no middleman, but understand that those houses will either turn into flips or into long-term rentals. So if that's something you're okay with your house being done, that's up to you, right? They will buy the house as is. However, they have the right to do due diligence and they are going to do that. So they might offer you $600,000, but then once they do the inspection, they're going to ask for another credit for $50,000, $75,000. That's just the way it is, right? They get you in on a price and then they bite your arm off one inch at a time. You don't have to do a lot of prep work. Absolutely. You can sell your house as is. As a matter of fact, you can stay in your house another two months after you close and they can do all these things. And they might even pay for closing costs and all this other stuff. So, but here's the thing. Are you willing to walk away from that 40? That's totally up to you. The downsize is the potential you're going to get a lot less money in cases that you would on the open market. Now let's take a real quick look here when we put things on the open market. Tempo. This is something I talked about last week. If you take a listing at say $250,000 and you sell it at 15% over, which is what the going rate was at one to seven days, you're looking at another dollar, right? It's a lot of money. That's hard to walk away from. If you're selling it and it's worth two and a half million dollars, you have to ask yourself, are you willing to walk away from that plus that? So not only is it's almost 1.375 million, you're walking away from a two and a half million dollar house. It's the same ratio. These are averages, right? So I can't tell you specifically what your house would get, but at the end of the day, your house is really looking at getting 12 to 10% over list price when you're on the open market. Things have changed a little bit. It's more, it's sliding towards a buyer's market. Things are slowing down right now, but when you're walking away from that kind of money, it might not be worth your time. So just keep that in mind. Do you need to sell your house quickly? Is your house in good condition? Do you have the cash on hand to do repairs? Especially here in Santa Clara County, your house can be worth a whole lot more if you put it on the open market. And if you think about it, your house will be open to the public. Think of it that way. It's going to be like a park for about seven to 10 days, right? And after that, it closes off. The blue lock box goes on and then there's a combo box and only two people have it. It's you, me, the buyer's agent, and then the appraiser will get that. And inspectors will be done beforehand. So there you go. Up to you if you want to do it or not. I know I can get the house sold in seven to 10 days. This segment of this episode is brought to you by the Home Inspection Checklist. If you're thinking about selling your house, get that honeydew list started. This Home Inspection Checklist is a list of what inspectors will look at so you can get those things repaired before the inspector comes through. If it's an appliance or a cracked window or what have you, scratches on the floor, broken switches, those can get handled before the inspector comes out and they call it out. Now, if you do those repairs, as with everything, you have to disclose it. So it's better to over-disclose and scare away the crappy buyers, I always tell people. So just remember that. So this is a little story about a lady who lived here and she's a teacher, a retired teacher, and she decided to downsize. So she's looking for a house, winds up being a condo. After 40 years, she downsizes and she's just sitting there. She has her friends, she has her community, she has her family, she has everything here. So she didn't really want to move out of the area, but she knew that her house was too much. She moved from a four-bedroom, two-bath 1960s house and decided to look for a condo. It's a two-story condo. Now, typically, the difference between condos and townhouses are a condo is one flat, one apartment, and a townhouse will have different levels. That's not a rule of thumb. It's not written in stone. In a condominium complex, typically you own, let's say there's 50 units in that property, you own one-fiftieth of the community of that property. In a townhouse, you own a square plot of that land as well. Typically, not always. You also have HOAs that you have to deal with. So this one right here was a two-story in Santa Clara near Santana Row. It looks like it's recently updated. It looks pretty nice inside. And then this one's the bungalows in Los Gatos. And this is a 55-plus community and it's right off of 17 and Lark. It's a really nice area. But again, you're looking at multiple levels, right? So you're dealing with stairs. There's a two-bedroom condo in Sunnyvale. Which one did she choose? Ultimately, she chose the agricultural-inspired development in Santa Clara, which I think is that one up in Santana Row. In the middle of a lot, no established vegetation. Master gardener, I needed someplace with trees around me. She felt like the unit was just two stories, so she did get a two-story unit. That's the trade-off. When you go to a condo complex or what have you, you're going to deal with stairs. With a house, you're going to find there are a lot of houses that are still single-story. My next house is going to be a single-story. I hope. We'll see. But she got to transfer her tax basis over because of Prop 13 and Prop 19, which is nice. And since she's over 55, she gets to take advantage of that. So there you go. There's a little story, something to think about as we all age. If you have questions, I'll have to walk you through it. Cupertino House of the Week, Linda Vista Drive, not my listing. Four-bedroom, two-bath, 21 square feet, built in 75. This is a nice little ranch. It's amazing how crazy expensive these have gotten, huh? But here's the thing, right? An average house right now is $2 million. So if you want something nice in a nicer area, not steering, but you're going to pay for it, right? And this is all updated and beautifully done. It's a really nice house. So there you go. And it's really close to Monta Vista High, Kennedy, and De Anza because I went to these schools when I was a kid. I graduated at Monta Vista High. I went to John F. Kennedy Middle School. I have a friend that actually taught there, so pretty cool. Let's show you where it is on the map right there. So Kennedy, Monta Vista. Oh, the house looks like it backs right into it. And when I was a kid, I lived, where is that? Oh, McClellan. Yeah, I lived right here. No, oh, right here. This is where I lived, right here. And that building right there, funny thing, huh? So there you go. Okay, look at Linda House of the Week. This is not a ranch. This is more of a cottage, $2 million, three-bedroom, two-bath, not my listing, 1523 square feet, built in 1955. And the reason why I picked it is because it's walking distance to Lincoln, age 69, days on market 12, walk score 90. See, being downtown, in the heart of things, you can walk downtown, have some fun, get a little drunk, and stumble home, crash out. There you go. It's a perfect place for you. And this one, these are updated. These pictures, I tell you. Guys, if you're going to do this, do it right. Hire a professional photographer. So this looks like it was updated back in the 2000s. This is a very popular design back in the 2000s, maple toffee, cart cabinets, and stainless steel with granite, brownstone, I think it was called. But it's a nice small house, 1500 square feet. All right. And then Bunda, the Luxury Home of the Week. I wish this was my listing, but it's not. Eight bedrooms, eight full baths, two half baths, and only 18,000 square feet, 1900, built in 1924. And this is right by the manor. This is decadence, opulence, luxury, everything, fine tooth comb. Everything is worth it. If you have, how much was it? Only $68 million. And that's what you get. One day, I got to start playing the lottery though. And as always, these are all available to you in the blog. So go to the blog, check it out. Links are there. You can play with it. There's no entry. You don't have to give me your information. You can just go freely play with it, have fun with it. And this segment is brought to you by the Home Buyers Checklist. When you're looking at open houses and you're going to four or five houses, this one will allow you to compare and contrast each house. It has dual pane windows, air conditioning, new kitchen, new bathrooms, floor, that kind of stuff. It walks you right through it. And it helps you compare four, five, six homes that you go to so it doesn't get fuzzy. And it allows you to, it's a pretty well written document. There you go. This is the Bay Area housing report for the 43rd week of 2024. Year to date, we're looking at Santa Clara County, punched it out of the park, 400 million in closed transactions last week. We're now officially over 15 billion in transactions in Santa Clara County. Half, or San Mateo only has half of that. And their difference is their houses are a little bit more expensive, a little bit more opulent. It's a lot more expensive there. And the reason why is because Santa Clara County is the heartbeat of Silicon Valley. So there you go. Santa Clara County has the most, Alameda County is there, and Alameda by far is a lot more affordable. So if you're thinking about buying, maybe look at Hayward area, Fremont area is going to be expensive still, but the further up you go, that's a great place to go. And as always, Napa is the best buy because you're looking at 96 cents on the dollar versus the Santa Clara, where it's 7% or 7 cents on the dollar. So.