Tips for Buying Real Estate in a Seller’s Market
Real estate investors looking to expand their portfolios or enter the business for the first time are facing a seller’s market in many areas of the country in summer 2020. Low interest rates combined with limited inventory of existing homes is driving prices up and creating competition. Suburbs within commuting distance of cities with strong employment like Atlanta are experiencing a boom in home sales. Houses with three bedrooms and a fenced yard are in the sweet spot for millennials in their 30s looking for a place to raise their kids. These types of homes are receiving multiple offers, some far in excess of asking price, in the strange seller’s market of 2020. Competing is tough but not impossible with these tips for buying real estate in a seller’s market.
Make Sure Your Finances Are Ready
Investors who must finance a purchase face very tight requirements from lenders. Ready cash for a down payment and near perfect credit are necessities. Financing for investment property may involve a larger down payment on owner-occupied property. Know how you’re going to pay for the property before you start looking.
Start Early and Prepare to Act Fast
In the summer of 2020, homes are selling in hours, not days and weeks. Know what you’re looking for and how much you are willing to pay, and be ready to act fast when you find a property you want. If you can pay cash, you have a leg up on other buyers waiting for mortgage preapprovals.
Keep It Simple
An offer for an attractive amount, free of contingencies, timelines, and other requirements attracts a seller’s interest. Be aware that some buyers in the northeast are even offering prices above asking while foregoing inspections. Making the transaction as simple as possible will be a relief to a seller sorting through multiple bids for their home.
Use an Experienced Real Estate Agent
An agent can give you the perspective you need not to get carried away in a highly excited market. Get the help of an agent acting as your representative (buyer’s agent) who can keep things in perspective, provide realistic comps, and give you some context about the property you are considering and its potential as a rental.
Some sellers will balk if they know an investor is buying their beloved home with the intent to rent it rather than live in it. Investors should ask their agent’s advice about the write-a-note tactic for buying real estate in a seller’s market. Writing to the seller telling them why your offer is best and that you are the perfect buyer may get you somewhere, if your note includes reassurance that you would take very good care of the home.
Keep Looking for Distressed Properties and Foreclosures
The pandemic has been a financial disaster for some homeowners. There may be properties available that aren’t showing up in typical real estate listings. Look for rental property management companies in Dawsonville and other major cities to learn of properties that may show up in public records as foreclosures or search online on sites that exclusively offer investment properties.