PROBATE: Market Value vs. Cash Offer from Real Estate Investors? Choosing the Best Option
When selling a probate property, particularly in a time-sensitive situation, you may face the choice between listing at market value and accepting a cash offer from an investor. Understanding these two options will help you make the best decision for your goals and circumstances.
Listing at Market Value
Choosing to list your property on the open market targets a wide range of traditional buyers. This approach typically attracts the highest and best offers, especially in a competitive market. Selling at market value maximizes your return, which can be ideal if the property is in decent condition.
However, a traditional sale comes with certain drawbacks. Finding the right buyer can take weeks, and once under contract, buyers may request repairs or negotiate further based on inspection results. Additionally, mortgage approvals and contingencies can prolong the closing process. If you have time and want to maximize profit, this may be your best route.
Accepting a Cash Offer from an Investor
In California, a large number of investors make cash offers to purchase properties quickly and usually in as-is condition, meaning you don’t have to worry about repairs or updates. Cash transactions eliminate the need for financing contingencies, allowing investors to close within days—making this option ideal for sellers in need of quick cash or those looking to simplify the process.
While this sounds convenient, selling to an investor has its downsides. Investors typically buy at a significant discount—often at least 30% below the after-repaired value (ARV). Since you won’t have competing offers driving up the price, you lose leverage once under contract. Additionally, not all investors are reputable, and some may attempt to renegotiate the price or extend closing timelines unexpectedly.
Making the Right Decision
Ultimately, the choice between listing your home or accepting an off-market cash offer depends on your specific needs. Consider your timeline, the condition of the property, and your financial goals. If you have the time to wait and want the highest possible return, listing may be the better option. If speed and convenience are your top priorities, a cash offer could be more appealing.
Navigating a probate sale can be complex, but you don’t have to do it alone. We at The Kaur Gray Group specialize in helping sellers make informed decisions that align with their unique situations. Contact us today at 951-807-0017 to discuss your options and determine the best approach for your probate property sale.