This is one of those questions that could take quite a while to answer. Fortunately, my wife wants to hang out with me, so I will keep this rather brief. The bottom line, whether it's an investor or first time home buyer, is the net proceeds to the seller combined with other critical terms (down payment, removal of contingencies, days to close, et.al) I believe the way you are asking the question means you are giving some assumptions to those labeled as "investors" versus those as "first time home buyers". I get that investors may have greater financial resources than first time buyers, but that is not always the case.
Also, keep in mind (for example Fannie Mae Homepath Properties), they do not allow investors to make an offer within the first fifteen days a property is on the market. In this market, any property that is priced well (especially those typically at the price points of your standard 1st time homebuyer), will be in pending prior to the 15 day period passing.
Anyway, that's the short and skinny, but would be happy to discuss in further detail with anyone.
Chad Basinger, REALTORÂ®, CPA, CFPÂ®
Rene J. De Blanco
If you are prepared with either your approved financing or cash, and are ready to go, we can secure a property for you.
Jay Becker - Senior Real Estate Consultant
Lux-RE-Homes - http://www.OWN-SD.com
Office: 858.222.4321x7 | Mobile: 858.335.4235
For a short sale -
The seller is not going to benefit by selling for the property for a higher price. So, why would a seller select one offer over the other? It comes down to the buyer's agent's ability to prepare an offer the listing agent finds attractive. In reality, a short sale seller is going to go with the recommendation of their agent when it comes to offer selection. What makes an offer attractive to a listing agent? Give me a call and we can discuss the details.
Lesson: Make sure you agent knows what it takes to make your offer stand out against the others.
For tradition sales -
Price is important. But, as you have probably seen, the terms of the sale and financing are abundantly critical. If I have a property listed at $500,000 and get an offer for $550,000 and another for $490,000, which one would my seller find more attractive? It all depends on the terms. Selecting the highest offer is not always the correct answer.
From my experience, buyers who utilize closing cost grants or similar assistance programs are going to have a tough time getting an offer accepted. If you share a little more information about your situation, you should get more specific and helpful feedback.
Each situation is unique. An experienced agent can guide you through the process and get you into a new home.
The trick in a market like this is to target areas that are getting ready to bloom. Be prepared to add sweat equity to your property, and in a few years you'll be sitting pretty with a personalized house in a rejuvenated neighborhood.
I've also found that some listing agents and sellers are sensitive to the plight of the first-time homebuyer and will consider offers accordingly. This is where those letters of appeal become so very important. When competing for a property that might be a target for investors, the first-time buyer needs to be over-prepared, flexible, and patient.
Just this week I got a call from a listing agent. We had bid on her REO listing which generated 31 offers. The offer they took was a cash investor. Believe it or not the cash investor ran out of money and cancelled the deal ...just goes to show you...things happen. The agent called me to give my buyer a chance at the property.
First time buyers should be prepared to really work at it for a few months....If you are reasonable in your expectations, you will likely get something!
A first time buyer has exactly the same USD as the investor.
So what is your question?
Why are first time buyers losing to much of the time?
They are not following or hearing good advise?
Residental buyers actually get a head start on many foreclosed properties. A HEAD START. That means they have an advantage if only they followed the advise provided.
Too many live in denial. They believe they will be able to snag a house for 40% of value. Their agent has aggreed to participate by hanging paper on every foreclosure that comes on the market muttering to the buyer, "You never know what will stick."
Bad advise followed by the unrealistic results in pepetual frustration.
If a first time buyer wants to buy a home in any market, they must make their offer competive with other offers received. That means you must reckon dead the idea you willl get a livable home at 40% of value and be ready to come in strong with a clean offer. If the buyer is packing FHA or VA baggage, they will need to be more creative at becoming competive.
What do they not understand about competivie?
Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
I could not agree more with Hector regarding the right Realtor. I feel financing is everything in a Seller driven Market. If you add Closing cost Grant to the equation your offer becomes that much stronger since yiur not asking the seller for any concessions. Happy to assist you.
Area Manager/San Diego
Direct Lender with Grants
If you need any help in finding a home and submitting offers, let me know. If you already have an agent, he/she probably already gave you a list of things you can do to strengthen your offers.
Don't give up, prices are increasing because of the lack of properties on the market.
-Letter of approval from the lender
-Proof of funds
-DU Results, Credit Report
Hector R. Gastelum
Realty Executives Dillon