Home sellers can avoid the stress of a complicated home transaction process and sell directly to a traditional investor or an iBuyer. These kinds of sales may allow sellers to bypass things like inspection contingencies and avoid appraisal concerns or buyer financing issues. Even if you start off intending to sell to a traditional buyer, you might end up getting a compelling offer from an investor, perhaps one with minimal contingencies and the promise of a quick close. But before you accept, its important to understand how the process differs from a typical transaction. And if it feels too good to be true, it probably is. Read on for everything you need to know about selling your home to a professional home investor.

The term buyer is used to broadly describe people who buy homes, but buyers can come in varying forms — traditional buyers, traditional investors and iBuyers. The type of buyer you accept an offer from can impact the rest of the transaction process.

Traditional buyers are people like you, when you bought your current home. Theyre looking to purchase a property to reside in, either as their primary home or as a vacation home.

A traditional buyer will make an offer based on their perception of your home and their research on its market value. Theres also an emotional component to the purchase. Maybe your home has a unique quality they have been looking for, like a big yard for their kids or the perfect layout for their needs. Traditional buyers may pay more than market value for the features they crave, or they may be willing to pay above asking price in a multiple-offer scenario.

According to the Zillow Group Consumer Housing Trends Report 2018, these attributes comprise todays average traditional home buyer:

A professional home investor is either an individual or a company that buys residential properties as part of a business or investment strategy. Individual investors may own just one or two investment homes (that they either keep and rent out or flip and quickly resell), but companies that buy houses usually do so in bulk. Home buyer investors usually employ one of four key strategies.

A buy-and-hold investment strategy helps an investor grow a real estate portfolio over time. An individual might use this strategy to buy a home to rent for side income. They use something called a cap rate to determine their yearly expenses versus their potential profit and see if an individual investment pencils out before buying. A larger corporate investor may buy a home without renting it if they are simply trying to grow their portfolio or want to wait for improved market conditions.

Investors who buy properties and then resell them very quickly (and without making any improvements) are using a strategy called wholesale investment. They buy homes at well below market value, with the goal of selling to another investor for a higher price. Successful wholesalers usually have a large list of buyers lined up beforehand and use direct marketing to identify inactive or off-market homes they can buy inexpensively.

Individuals or companies who buy houses, renovate them, and then sell them at a higher price are called home flippers. While the level of renovation needed and completed varies by the individual home and the local market, the goal is to make a profit on the resale, even after clearing all renovation expenses.

This type of investment is a hybrid of some of the other strategies covered above. In this case, individuals or companies buy a property, renovate it (in either minor or major ways), and then rent it out at a premium, while maintaining ownership.

Like other professional home investor companies, an iBuyer is a house-buying service (not an individual). What makes an iBuyer different is that they use technology to streamline the selling process, which can mean less hassle for you as the seller. iBuyers rely on a wealth of data and comparable home sales to make offers, often sight unseen.