Traditional Homebuyers vs. Real Estate Investors: Are They the Same?

Every good salesperson knows their target market. In real estate, that could be a traditional homebuyer, a real estate investor, etc. If you’re selling a property but don’t know much about various types of homebuyers, no problem. In this article, we’ll talk about the two most common types of property buyers, traditional homebuyers and real estate investors, so you would know which marketing strategy to use for each type. Are you ready? Let’s get straight into it.

What is a Traditional Homebuyer?

A traditional homebuyer is someone who’s looking to purchase a property to reside in, either a primary home or a vacation home. A homebuyer could either be a family, couple, or a person looking for a new place they could call home. The average homebuyers in the United States are 45 years old, while about a quarter of buyers are in their 30s.

How to Sell Your Home to a Traditional Homebuyer?

Homebuyers purchase with emotions supported by statistics, so if they’re your target buyer, you should exert more effort in marketing and advertising your house. We suggest that you add as many pictures of the property’s interior and exterior as possible when listing your home. You should also describe the community, talk about the neighborhood, and/or elaborate on the nearby establishments (e.g., schools, hospitals, parks, malls, etc.)

You can go the extra mile and do a virtual house tour to bring in more prospects to give potential buyers a feel of your home. Homebuyers may need the home in excellent condition with curb appeal and all since these people are looking for their potential new abode. It’s safe to say that you should prepare to invest in making necessary repairs and renovations to attract a homebuyer. But the advantage on that is you can also sell your home at a better price as compared to selling it as it is.

Traditional homebuyers, whether first-timers or tenured, could make an offer based on your home’s market value and other statistics, and they usually tap real estate agents to assist them in the process. It’s also good to know that they usually qualify for unique benefits such as low down payments or special grants sponsored by the state or the federal government.

What are Real Estate Investors?

 Real estate investors, also called property investors or home investors, acquire residential properties as part of a business or investment strategy. Real estate investors could be individuals or companies that buy properties, fix them up, and then resell them or use them for another source of income. Home investors rarely live in the houses they buy, so there could be less emotional connection involved in the sale process.

Why Do Real Estate Investors Buy a Home?

Real estate is a viable way to build wealth over time, and this is why property investment is rising in the U.S. According to a Redfin Corp report, real estate investors acquired a record of 18% of homes sold in the third quarter of 2021, betting on $64 billion that home prices and rents will continue to rise.

Individual investors typically own one or two investments homes, but company investors purchase homes in bulk, and they usually employ four strategies in doing so:

• Buy-and-hold investment – helps investors raise a real estate portfolio over time. An investor might purchase a home to rent it out for some side income, while some wait until the market conditions improve before reselling.
• Wholesale investment – when investors who purchased a property resell them quickly without making any improvements in the home. This is usually done with properties below market value to sell to another investor for a higher price.
• House-flip investment – when investors acquire residential properties, renovate them and list them on the market for a high price. The investor’s goal for flipping houses is to gain profit from the resale.
• Hybrid investment – when investors acquire a property, renovate it, and then rent it out at a premium while maintaining ownership.

How to Sell Your Home to a Real Estate Investor?

Real estate investors buy various types of properties, whether it’s an inherited home, foreclosed property, a home in disrepair, or a property currently in escrow. You can go to an investor if you need to sell your home fast as they rarely require home improvements, and they usually have cash on hand. This also means that you don’t have to shell out money or spend energy and time for upgrades and the like (but you may still do so if you want to increase the value of your home in general).

Real estate investors have their own processes for buying a home. But the most common format includes reaching out to them with the details about your home through their website or contact details. Then, they will schedule a visit to your home to assess its state and the offer they would give you. Home investors typically compute the costs of doing repairs and renovations and then make an offer based on that. From there, you can decide if you like to proceed with the sale or not.

If you’re interested in selling your home fast or if you don’t have the means or time for home adjustments or repairs, you can reach out to Shorefront Investments. You just have to fill out a form to receive a no-obligation offer. Learn more about their homebuying process here.

The Bottom Line

Selling your property to a traditional homebuyer or a real estate investor has its pros and cons. The type of buyer you should choose depends whether you need to sell fast, or your capacity to spend on repairs, furniture upgrades, etc. The most significant difference between them is the fundamental reason they purchase a property, and the sale process they follow. Traditional homebuyers are looking for a property to live in, while real estate investors acquire property for a business or as an investment, so you can bank on that when closing a sale. Good luck!