Every action has an equal and opposite reaction. We all learned that in science class. It’s true not only in nature, but also in real estate. Times are tough for sellers who formerly ruled supreme. We all know it’s a buyer’s market. But, have we figured out yet that it’s also an investor’s market?
Think about this if you have been considering the money-making possibilities of real estate.
The selection today is phenomenal. It’s the best time for buyers in any price in years. Just last year and certainly in 2006, the inventory even in vast L.A. County was minute. Today, homes are languishing on the market for months, despite price cut after price cut. Oh, happy day!
Back in the sellers’ market, buyers inevitably got involved in bidding wars. Every “good” listing immediately had multiple offers. Sellers had the pick of the crop. Very often, the “winning” offer was above list price. The trick then for buyers was how high above list to go in order to beat out the other offers. Good for the sellers, bad for the buyers. Today, no bidding wars.
Now if you make any offer, especially on property which has been on the market for awhile, as most have, sellers carefully consider your offer, even if it’s far from what is desired. Selling a home has a psychological dimension. If the home has received no offers for a significant time period, sellers lower their expectations.
Sellers today are willing to make concessions. Do you have a repair request? Last year or the year before, forget it. In this market, though, sellers are more willing to make repairs or lower the price. Do you want a long or short escrow? Need to sell yours first?
Sellers today are making special deals we haven’t seen in years. Looking for seller financing? You may find it. Looking for lease option? That’s more likely, too. How about VA? Sellers will consider any offer these days.
Do you hate to rush? Buyers in the sellers’ market had to make instant decisions. No more. Since property is on the market longer, buyers have a chance to think through their choices, always a good idea when making a major decision.
As mentioned last month, now jumbo loans and FHA loans are available up to a loan amount of $729,000. This is a huge benefit for buyers. Yes, the crazy loans of the past are history, but teachers, police officers and first-time buyers, buyers in specially designated areas will get special deals. Many new home builders are offering special financing.
And last, but very important—few investors are out there today. If you want to invest, you have far less competition than in previous years. The selection is great. Sellers’ motivation is great. The only missing element is available money. You may have more than you suspect. Check out the next post for an unheralded way to invest in real estate.