Should You Sell Your House To A Builder?

 New construction condo building in Chicago.

The incredible demand for new construction houses and condos in some Chicago neighborhoods has brought many players into the field now that the market has recovered. This increased competition is pushing prices for land considerably higher. As long as the cost to acquire land can be transferred to the end buyer, there is no reason to assume the trend will stop in the near term, but one should expect buyer resistance to ever increasing prices to take hold at some point.

Anyone who owns an older house or a building in a core Chicago neighborhood, where the highest and best use for the property might be to tear it down and rebuild, has probably received letters and inquiries from builders and their real estate agents offering cash, a quick close and convenient terms. 

If you find yourself looking to sell your tear down house, there are obvious benefits to selling to a builder. These could include paying a very low commission or no commission on the sale, closing quickly, selling the property as-is with no repairs needed and fewer overall hassles. Builders and real estate agents who work with builders, also tend to be actively in the market at all times, so someone who wants to sell an older house isn't limited by the seasonality of the market.

On the flip side, the advantages of selling your older house without a real estate agent on on your side, can quickly be off-set by getting involved in a transaction with the wrong buyer. If you choose to sell your house to someone who approaches you, make sure to find out who they are and what their history of buying properties is. A lot of folks represent themselves as buyers, when they are in fact, not personally capable of purchasing your property. Be wary of this. 

To protect your interests, ask questions and find out who you are dealing with. If the builder is making a cash offer, request a proof of funds letter from their bank. Find out how many homes they have built in the last 12-24 months. If you are receiving an inquiry from a REALTOR on behalf of a builder or investor, can he demonstrate a history of selling properties like yours in off-market transactions? Does the REALTOR really have a buyer or is he just looking for a listing? REALTORS can be a tremendous resource and many times they have the ability to present more than one credible offer for market value.
 
If you're considering a sale, it would make sense to look into all the options you have to maximize your sale price. Selling your house to a builder who expresses an interest in your property or talking to a REALTOR who represents builders and investors, both have advantages which include lower expenses related to the sale, selling as-is with no repairs and fewer overall hassles. Sellers who are concerned with potentially leaving money on the table might be better off listing their property for sale on the MLS, to ensure maximum exposure to all active buyers in the market. All methods have their pros and cons depending on your situation and ultimate goals related to the sale of your property.

 

Learn how to sell your tear-down house to a builder in Chicago. Click here to request an offer or call Brent Hall directly at 312-725-6171.

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Brent Hall is a Broker Associate with Jameson Sotheby's International Realty, Chicago. Contact Brent Hall to discuss buying and selling real estate in Chicago.