Is it Safe to Sell to an Investor in El Paso, Texas?
So we get this question all the time from sellers selling every type of house, whether it’s their own personal house, a house they inherited, a bad rental, etc. and the question is, “is it safe to do business with an investor? Am I going to get left hanging?”
The honest answer is yes and no.
First off, it’s very possible to be left hanging by an investor or taken advantage of by one. It’s an unfortunate consequence or circumstance in our profession. There are some things though that you can do to protect yourself from being taken advantage of and left out in the cold.
Before I give investors a bad name, allow me to preface this with the fact that not everyone who calls themself an investor is actually an investor. A lot of times it is just a weekend warrior who went to a two-day seminar at the Hilton or Chase conference room and walked out calling themselves an investor because they took two 3 hour classes and bought themselves some business cards online.
The first thing you can do to protect yourself from being taken advantage of is research the company:
- How long have they been in business?
- What do past customers say about them?
- Does the investor that you’re talking to actually own any property or are they just in it to see if they can make a few bucks?
Often times the legitimacy of an investor is not based on how well they speak about the subject, but rather if they’re actually involved in the industry. Truth be told it’s pretty easy to research if you just get on the Central Appraisal District website or jump onto EP County.Gov and type in either the business name or the investors name and see if there’s any properties registered with them. We encourage our sellers to do their due diligence so they feel more comfortable dealing with someone they know actually invests in our city.
Second, you want to make sure you understand the structure of the deal. This is not just like selling a used car or selling something on Facebook where if you lose, you lose, no big deal. This is your house, your name and your credit, your money is all tied to it. Make sure if you’re dealing with an investor that you double check to see what type of purchase it is going to be.
You want the investor to make it a straight purchase not a take over payments or wrap-around type of deal because when those things happen, your name, your credit and your ability to buy another house in the future stays on the line. You’re still responsible for the property that you thought you sold. We’ll have more videos and articles about wrap-arounds and take over payment deals for your education, reference and protection.
Third, you want to make sure that you are closing at a title company this should be non-negotiable. The title company serves as an insurance policy issuer that insures the sale of your property. If something were to go wrong in the future you would no longer be held liable and no longer be legally attached to that property. Yes, this means it takes a little more time but it’s worth it when it comes to you being attached to a $50,000 / $100,000 / $200,000 loan that you don’t know is happening in the background. It’s becoming more popular to hear that an investor will offer a little more cash if you’re willing to close outside of a title company. But that little more cash is not worth it when a lawsuit comes up later. We’ve seen it happen and we want to protect you.
Lastly, a measurable way to protect yourself, if some of these other things are not looking up to par, is how much earnest money the investor’s going to put down. Most times an investor who seems a little shady is going to put down $50 bucks or even as little as $25 earnest. Which means he’s saying his level of commitment to buying your house is $25 worth. A hundred bucks or two hundred bucks is not a horrible thing if all the other boxes are checked, but if none of these boxes are checked and there’s only $25 worth of earnest run as fast as you can away from that negotiating table cuz you are in cahoots with a shark, or an inexperienced investor who’s going to cost you valuable time. And if time is important in this moment it could potentially cost you your house.
Quicksell has been in business for 15 years. We’ve bought over 1,500 properties in El Paso. Qe are local. We’re homegrown. We went to school here and we love our city. When you work with Quicksell, you work with people who care about you. Who care about your problem. And want to see you win in the end. If you want to schedule your free no obligation property assessment give us a call at 915-593-3300 or visit our website at ww.w.Quicksellbuyers.com