Buyers are in the driver’s seat and sellers are paying the price. The competition among home sellers is fierce and sellers have to be increasing flexible with buyers to sell their properties. This means we as investors need to be aggressively chasing after deals and making offers to sellers. We are not always going to know how motivated sellers really are and the only way we can know is by making offers.
It is a great time to be a real estate investor. There are more motivated sellers and more properties sitting on the market than there has been in a long time and this creates tremendous opportunity for investors.
The article below discusses what sellers are currently facing in the real estate marketplace.
NEW YORK (CNNMoney.com) — A rock-bottom price just isn’t enough for buyers these days – it’s a starting point. If the furnace is out of date, they’ll demand a new one. Cracked driveways have to be repaved, and dirty carpeting torn out and replaced. All at the seller’s expense.
Buyers are in the driver’s seat and they know it. They’re using that leverage to pry more concessions out of desperate sellers than they ever dreamed of during the bubble.
“‘Now it’s my turn,’ is the attitude,” said Mike Byrd, a real estate agent with SLO Home Store in San Luis Obispo, Calif. “Some buyers are really putting the screws on.”
In New England, buyers are demanding that sellers pay to fill up a home’s heating oil tank. In California, sellers are forking over closing costs. Nearly everywhere, buyers are insisting that sellers purchase a home service contract providing a one year warranty on all of a home’s appliances.
New central air-conditioning systems, a year of condo association fees and even two weeks in Hawaii are just a few of the incentives that sellers are having to employ these days, according to Byrd.
And buyers are getting it all in writing.
“[During the boom] buyers usually accepted the property as-is, and we even occasionally offered to pay the seller’s state and county transfer taxes,” said Washington D.C. based agent John Sullivan, who is also president elect of the National Association of Exclusive Buyer’s Agents. “No more.”
Free closing
These days, sellers almost always pay the closing costs instead of the buyers, according to John Rygiol, an Exclusive Home Buyer Brokerage agent in Orange County, Calif.
“It’s hard to ask for that after already getting a price reduction,” said the agent, who recently got a seller to pony up $10,000 for closing. “But it’s a buyer’s market and sellers are attuned to that.”
Even local taxes are on the table these days, according to Adele Hrovat, the owner of The Buyer’s Realty of Las Vegas. She got the bank that was selling a four-bedroom, three-bath, house to pay an $11,000 tax assessment on top of $6,000 in closing costs. And that was after the price was slashed from $489,900 to $399,000.
With the housing market bad as it is – slow sales, dropping prices and inventories rising – sellers are going to have to stay flexible.
“We’re finding that buyers make an offer and if it’s not accepted, they just go on to the next seller,” said Don Plourde.
Posted by Carter Brown
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