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eleanor hart…, Home Buyer in Kingman, AZ

I Iam not an investor but I do want the best for my money,why can't sales people help me are they keeping the best deals for real INVESTORS

Asked by eleanor hartmann, Kingman, AZ Sat Mar 31, 2012

looking for cheapest house

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Agents make money no matter "who" they help. Investors pay cash and close in 10 days to 2 weeks with no contingencies (i.e. inspection, loan, appraisals, etc.). I'm not sure if you're financing the property you're looking for, but if your expectations are that of a buyer that is low balling or offering much lest than the list price, expecting an additional price reduction after the inspection, etc. maybe you're not being realistic and have gone through a few agents because you don't want to listen to them?
0 votes Thank Flag Link Sun Apr 1, 2012
Well spoken. The reality of this market is that a buyer better be willing to remove everything, and give everything until the builders start kicking in to balance the high demand, and low supply.

Most of my buyers will not go below 8% Annual Rate of return, so once we get there then some natural demand will slide away, but that is still a little ways out, and some price increases up.

I see the natural progression of real estate prices going up to meet what somebody is willing to pay for rent on a home. They will trade in renting to home ownership, and get the option of a possible tax write off.

One thing many people do not understand is that in 2008 mass amounts of strategic defaults occurred, and these owners are now leaving the rental market in herds to buy. This means we will see a stablelization of rents too, and in time we might see the landlords selling their properties back to end uses if the supply of vacant rentals increases while the demand decreases
Flag Sun Apr 1, 2012
Actually, as of 5 minutes ago, we have 140 active listings in Maricopa (excluding acreage homes which are a whole different animal). Considering that we have averaged around 170 closed sales in the past few months, we are well under a one month inventory. Obviously, this could change in the upcoming months as the seasonal buyers are beginning to migrate back home.
0 votes Thank Flag Link Sat Mar 31, 2012
I did a macro look at it. I did not exclude anything. Doing numbers are fun. If we can look at price points, pools, bedrooms, subdivisions, etc. Numbers tell many truths :-)
Flag Sat Mar 31, 2012
Right now the investors do want what the owner occupants want. The issue is that many buyers are not educated on stats, inventory, how investors think, and that we are in a sellers market and not a buyers market. I have not ran my days on market numbers today, but I think we have 1.9 to 2 months of inventory in Maricopa. This includes all homes for sale. I think Casa Grande has 1.4 months if inventory. Anything below 4 months as we know is a sellers market. Then if we look into annual rate of returns for investors these numbers will tell the truth to buyers and sellers.
0 votes Thank Flag Link Sat Mar 31, 2012
Those are very good points by Bea. The other thing to take into consideration is that almost all investors are paying cash and, if you are planning on financing it would put you at a huge disadvantage. All sellers will take a cash offer over a financed one if they are equal and many will even accept a lower price if it is cash.
0 votes Thank Flag Link Sat Mar 31, 2012
I work with both owner occupants and investors. There are different "wants and needs". Many owner occupants (OO) want a home with minimal repairs needed. An investor has an allowance for repairs factored in and buys the home needing work. OO get impatient waiting on a short sale. Investors will wait forever. OO want repairs on the BINSR, investors already knew what needed to be done before they offered. OO want to think about it, half the time an investor hasn't even seen the house. They are going on the recommendation of their agent.

The market right now is very active. If you are looking to offer way less than asking price, chances are your offer will be outbid. Your agent can give you comparable sales to make an informed offer on a property.
Bea Lueck
Rox Real Estate
Casa Grande, AZ
0 votes Thank Flag Link Sat Mar 31, 2012
I'm not sure what problems you encountered but you mat need to find another agent. That being said, there really is not too much competition between investors and owner-occupants for homes in Maricopa right now. With inventory levels at an all-time low, most of the homes available for sale are priced too high to make sense for an investor. In a market like this, investors prefer to purchase their homes at Trustee sales, at least most of mine do.

Patti and I have lived in Maricopa for over 9 years and ONLY deal with Maricopa real estate. If you are interested in purchasing here, give us a call or send us an email. I can assure you that we will give you the same level of service as the rest of our clients. We are about PEOPLE, not properties!
0 votes Thank Flag Link Sat Mar 31, 2012

Some are, and some are not I am for sure. I know my local competition, and I can tell you they are not. They are letting their sellers have all of the offers, and simply choosing the best offer. Sometimes it is the highest, sometimes it is the strongest, and sometimes it is both.
0 votes Thank Flag Link Sat Mar 31, 2012
No. Agents don't keep the best deals for investors. The thing is, though: Investors use different techniques to buy than do "retail" clients. So sometimes they do get better deals. And here's a real secret: Some agents don't like investors and would prefer not to work with them.

As for the different techniques: Sometimes investors buy with all cash. That gives the seller more confidence that the sale will close. And usually it'll close faster. If you want to do an FHA loan at 3.5%, that's fine, but you'll need an appraisal. You may need other things. You might be asking for closing costs. You might not be prequalified. All of those can factor into who gets "the best deal."

Another example: Sometimes investors buy run-down houses to rehab. Those are houses that aren't currently fit to live in. Or maybe they're just outdated--no granite countertops and stainless steel appliances. And they're willing to buy the house in as-is condition. There's no back-and-forth about a "decorating allowance." Or "assistance with closing costs."

Another point: Investors aren't "looking for the cheapest house." They're looking for the best value, or a house that can have substantial value added to it. Maybe that's what you meant . . . .

Sometimes investors don't care about selling the house. They're looking for cash flow. So they might buy a house you wouldn't consider in an area of town you're not interested in. But the numbers--rental income versus purchase price--make sense for the investor.

Most investors don't want "pretty houses"--houses in good, fixed up condition. Usually, the sellers want--and can receive--top dollar for those.

Investors generally are willing to move quickly. They don't dilly-dally, taking weeks to decide on a property. That's in contrast to many retail home buyers.

So, short of being an investor, what can you do? Get prequalified or have the cash available for the entire amount. Be willing to look at a lot of homes in not-so-great condition. Be willing to make a decision quickly. And work with an agent who is at least comfortable with that approach.

Hope that helps.
0 votes Thank Flag Link Sat Mar 31, 2012
Don Tepper, Real Estate Pro in Burke, VA
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