How to Screen an Investor
The importance of investigating the legitimacy of an investor is, without a doubt, paramount to price they claim they can pay. Sellers must ask screening questions. Think of it like a reference. Before allowing someone into your home to watch your children, you call their references. You do this because you need outside confirmation that you are making a good decision; that the trust you are about to put into this person will not be in vain. An example offered on this post is to ask to speak to the investor’s HVAC contractor. You can apply pressure by asking them to speak to their HVAC guy on the spot. Let’s extrapolate on this idea and think about some questions you may ask the contractor in that conversation.
Questions to Ask When Screening an Investor:
There are a few reasons why this is important. Not only will this prove that the buyer in front of you actually flips houses, [because every house flipper has a go-to HVAC guy] but the answers to your questions will give you insight into this buyer.
- How long have you known _________________ (investor)?
This answer to this question may be enough to que you in, that this investor is inexperienced.
- How many houses have you worked on for ______________________ (investor’s company) in the last year?
Every house will most likely need the HVAC repaired/cleaned/serviced before selling. This tradesman should be going to every house they flip/own and you’ll find out if they are active or not. In our opinion, 6-12 houses a year qualifies someone as an investor who will actually buy your house.
- Can you give the last address of the house you worked on for ___________________ (investor), describe what the problem was, and what you had to do to fix it?
If the guy (or girl) stumbles the answer or you sense they are generally BS-ing, you know they either aren’t the investors HVAC specialist or they are trying to lie for the investor.
- Would you recommend working with _____________________ (investor) to anybody who may need to sell their house for cash?
The answer to this question will tell you about the character of the investor. Every investor should have a great HVAC specialist that they work with and whom they trust. If they don’t, take this as a warning sign. This investor potentially doesn’t care about establishing relationships with their trades and are always looking for a better deal – which is how they will treat you.
The question is, what kind of investor do you want to work with? If you need to sell a house for cash, please don’t hesitate to reach out to us by filling out this form. We will be back with you shortly.