I'm only posting this discussion because we really LOVED 3 properties so much we made full price cash offers, and included a nice handwriten letter to the seller. We lost to lower price offers by investors who could close in 14 days (so could we, but we didn't think of that), and would not need inspections (that one is dicey! obviously repairs, and if you get it for less...! These are evil games investors and their agents play!
Do you think these games are ok? They lack integrity. An investor wants to fix and flip. A buyer/ocuppant wants to fix and enjoy.
I am not a realtor, but we may sell MY home and if I see any of you realtors representing this type of buyer... you will NOT list my home! EVER!
Hi Susan. I'm sure being a buyer in this market is very difficult. In my area, central Florida, properties that are priced properly are selling for far more than the asking price. Investor do have an edge as most are making cash offers with quick closing. They have the added advantage of being non emotional about the property and can deal with repair or other issues that may come up because they are usually experienced buyers.
As an agent I love investor buyers as long as they are realistic about the price.
So...evil games? We as agents do not control what offer the seller accepts. We present the offers and let the seller make the decisions.
As a Seller, I would suggest not limiting your buyer pool by restricting the sale to end user buyers. The sellers goal should be to accept the highest and best offer that has the best chance of closing with the least amount of issues. This may or may not be an investor. Each offer should be reviewed on it's own merit.
If you were my buyer I would suggest making all offers your highest and best. Base this on the value of the property not the asking price. Make a substantial escrow deposit, offer to do inspections within 3 days or if the property is in good condition just waive the inspection altogether. Offer a closing date of 15 days or less. Be sure the offer is written properly, clearly and completely.
I hope this helps.
I forgot to add that you may want to look at FNMA foreclosures that are in the Homepath program or Freddie Mac Homesteps. These properties are made available to owner occupants 10-14 days before an investor offer can be considered.
Here's an article that will explain the programs.
Thanks for the link and the good advice. I knew about Homepath, but not Freddie Mac. Appreciate your answers!
Susan, your agent should have explained this to you. It's straight up business, no evil/devious games. In multiple offer situations, do your inspections prior to offer, so you have no inspection contingency. The inspection contingency, on certain properties/owners, can be very important. There are "wholesalers" out there tying up properties with a contract and trying to "flip" during their inspection period for a profit. The inspection contingency serves as their "free option" period. Offer quick closes, no financing contingency, and no inspection contingency if you can.
Wayne, our agent did explain, and he runs an ethical business. He shook his head in amazement that one of our offers at full price cash was turned down by the seller. We later found that the house recorded for about $20K less. It is frustrating!
We are in Southern California, and the market here is hot! Many houses have multiple offers that came in one day! We have been serious buyers since May, and have seen how quickly even the houses in the worst shape, with whacky floor plans and unpermitted additions, sell.
We offer cash, but it's mostly invested in the market and will take time to extract it. That makes it tough to close in 15 days. An inspector in 3 days is a problem because the window for offers closes fast, and getting an inspector is tough. They are busy. We have one lined up, but no guarantees he can get there that fast. An inspection is very important and we'll get it as soon as our offer is approved by GMAC.
Susan, Do you know any local contractors/handymen who you may use for repairs? If interested in a home, you may want to request a second showing and just have the contrator spend half an hour or an hour looking for what would need to be fixed and quote you a price BEFORE you put in your offer. If you have cash then this type of inspection may suffice for your needs.
Yes, Tara! A contractor helped us with a complete renovation on the house my husband owned, and let his late parents live in. What the contractor didn't see was the cracks in the slab until he lifted the carpet to replace it! A structural engineer made us replace the slab in 2 rooms due to root heaving. That was an unforseen big money expense. We will definitely have our contractor give us an estimate, and also have an inspector check out areas unseen for the house that we have made an offer on once an approval is made.
And, that's the difference between owner occupants and investors.... investors are willing to tie up properties and close fast because they have no problem realizing costs of rehab/repairs. Obviously, the spread is there to absorb "standard' costs. As mentioned in previous posts in this thread and others, your agent should explain things to you, and only you can decide whether to compete on the same playing field or not - meaning - best and highest - without contingencies - and be liquid cash ready. There is nothing devious about investors or even wholesalers or the RE agents and brokers who work with them. It's called capitalism. You are, however, two different types of buyers. So, if you want preferential treatment as an owner occupant, I suggest going after a HUD house within the first look period. Otherwise, what's on the market is fair game for all. ...that's my two cents ... Based on your previous posts, I'm beginning to wonder how experienced your agent really is, and why he seems to be bad-mouthing, or "shaking his head" at other RE agents who are working with a totally different type of buyer. In any case, Good Luck!
Well said Toni....
Hi Susan, I am sorry tyou didn't get the home you wanted. I don't see any evil games here though.
You should have brought your highest and best offer, knowing you could be in a multiple bid situation. Every offer can be in a multiple bid situation. Cash is not always king. I have found the inspections to be the highest hurdles in distressed properties. It is not shocking an inspection contingency waiver would hold more weight. You have no idea what kind of problems this house could have, so you may have avoided a disaster. As to closing in 14 days- you could have easily included language you could have closed in a min. of 14 days from approval. A risk taken by you not to bring the highest and best offer does not mean anything is fixed here.
On your next offer bring your highest and best if you absolutely can not lose the home. I don't see any games here by investors or agent/seller. I am perplexed why you think if the buyer is an investor who will fix up a property (either to rent out or sell later) is less desireable than someone who would offer less and may live in it (and who knows sell it in a year, rent it out, let it go in decline, etc). If your home does not need work and you are going for top dollar I highly doubt you would attract any investors, so I don't even see how that should worry you.
As I am mostly a listing agent I dont represent any investors- but I would certainly welcome them on any properties I'm seliing if they bring the best offer. I don't follow the logic otherwise.Sellers have to leave emotions out of the equation, otherwise they will short themself the best deal.
Thanks Tara. This whole short sale business is extremely frustrating to me. I tend to make up my mind and jump quickly, and my husband tends to overanalyze, so where I will jump in and offer high, he will not!
Our current home is my home alone, and I am backwards on it. We are going to try to rent it. It's a single family home on a golf course with pool/jacuzzi, outdoor kitchen, etc. The rent will never cover the payment, but it will help. I will not be on title in the short sale that my husband is purchasing for us which will make things less complicated for me to sell my home short if that becomes necessary. It's in very good shape, and not very old, so I doubt investors would be interested.
It amazes me how many realtors know nothing about short sales or HUD or aything! We wanted to bid on a HUD home, and our realtor wasn't HUD certified, so she referred us back to another realtor who made the offer, but didn't advice us to offer higher. We offered $40K higher, but still lost that one. It was probably a blessing. House had a neat floor plan but someone had stolen the water meter, and the pool was covered, and nobody knows what expense that could bring.
I'm glad to have found this site because if I do sell short, at least I'll find an expert. I am learning the questions to ask for sure!
Unless otherwise agreed to by the Seller (at least here in FL) all offers must be submitted to the Seller. When I was an agent, I would submit chronologically...meaning as soon as offer is delivered in writing.
If the Seller accepts the contract then it must be processed in good faith. Holding offers to see which one is best may not be ethical or legal in some places. I understand your thought process, but at least here in FL I would have in writing from the seller instruction to hold offers until a certain date or number is recieved, however most offers (here in FL) have 24-72 hours for response, so that would not be in the best interest of the seller unless the buyer knows that he is bidding against at least X others or that offers will not be addressed until Y date.
Remember that a seller's agent works for the seller, not the note holder. Make your plan with the seller, put it in writing so that activity (or inactivity) by the seller agent is covered in teh process.