Over the years, the real estate market has become more competitive for investors. Prices for single family homes has increased by 13% in most major cities and even higher in metropolitan cities such as Miami, Los Angeles, and Denver. In these cities, bidding wars are the rule: Tyler McKenzie of the Seattle-King County Association of Realtors, says one Seattle home spent a mere week on the market and received over 40 offers. So what does all of this mean? Competition is extremely fierce for investors. In order to succeed as an investor in such a hot market, investors must have an edge to beat competition.
Some ways to get deals in is to move fast. When houses are selling fast, you’ve got to be faster than rival buyers. No buyer can succeed if they don’t pull out all the stops. Another way to beat competition is to have your finances in order. In a sellers market, typically investors who are paying in cash will win the deal over investors who aren’t. In any event, being approved for a loan and staying in regular contact with your private lender is vital. Have an auto email alert set up from your real estate agent’s MLS. Know the new listings as they hit the market and be prepared to visit them right away. Be ready to make a move when the right property comes along. Lastly, make a clean offer. To make your bid the most compelling, be as flexible as possible to the seller’s needs. If you know the seller needs a quick escrow because they just bought a place, give it to them. If they just had a baby and need some extra time, go with a longer close or offer to close quickly but give them a “rent-back.” If you’re going to have inspections, check with the inspector and see if you can get an appointment soon after getting your offer accepted. That way you can remove your inspection contingency quicker. There have been times when a seller leaves 2 to 3 percent on the table; just to be sure the deal will close “cleanly.
In conclusion for an investor to succeed in a sellers market, there are a few things that need to be done. First the investor need to have an strategy to win the deals, which includes moving fast when the right property is first listed. Also make sure all finances are together to get the deal close and to make sure all offers are clear and clean to close accordingly.