Tips for Buying a Home in a Low-Inventory Market
By John Voket
If you're buying right now, you may notice that inventory is low. There are several factors you need to take in mind when buying in a tight inventory market.
Real estate investor Michael LaCava (biggerpockets.com) recently pointed out that when there are multiple bidders on the same house, you need to think and offer unconventionally.
The following are excerpts from LaCava's tips on how to do just that.
- All Cash Offers - When you’re selling a property after the rehab is complete, a cash offer is often more appealing than a finance offer – no need to worry about financing contingencies, banks and all that.
- Offer a Super-Fast Closing - For every day a house stays on the market, the seller is losing money. So offer a super-fast closing. LaCava says you need to get your inspections, financing and documentation in place in a short period of time. If you know you can do this, tell the seller you are willing to close within two weeks or less.
- Waive The Inspection - LaCava believes waiving the home inspection is a very effective tool to entice sellers to accept an offer. If you waive the right to an inspection, then all you have to lose is your offer deposit. For newer investors, however, LaCava recommends getting an inspection.
Dotty Reuning, and agent in Tennessee, says if you love the property and it appears there will be several counter-offers, make your first concession the largest.
Reuning also recommends finding ways to "give." She says sellers do want money, but they want other things as well. Consider the following:
- If you have a time share, let them use for a week this winter.
- Let the sellers stay in the house an extra two weeks after closing.
- If you own a large truck, maybe consider helping them move.
- Or pet sit for the sellers while they take a vacation after closing, or while they're moving to their new home.
Reprinted with permission from RISMedia. ©2013. All rights reserved.