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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsHouse hunters are increasingly going up against hedge funds in a hot housing market
Homebuyers are increasingly going up against hedge funds and other big institutional buyers in a hot housing market and they will need to bring their best offers to the table.
Cheri Benjamin, Realtor and CEO of Village Premier Collection, which services Atlanta, Las Vegas and Tampa Bay, said buyers might want to try and put down more than 20% and get their bank to wave an appraisal, as well as see what other contingencies they can do without. Thats because institutional buyers are now paying in cash and often at the listing price or above.
What's happening is that they are coming in and they are paying cash and they are paying over and above what the asking price is for the property, Benjamin said, stressing that before Covid-19, they often would only pay about 70% of the after-repair value on a house because they intended to flip it. They are entering more into the buy-and-hold market versus the buy-and-flip market. That's why we are seeing a bit of a shift from that.
Homebuyers are going up against institutional buyers more and more, according to property database Attom Data Solutions LLC. Institutional investors accounted for 4.6% of all single-family home and condo purchases in the second quarter of 2021, the highest share since the fourth quarter of 2015. That is up from 3.2% during the first quarter of 2021 and more than double from the 2% during the second quarter of 2020.
https://www.bizjournals.com/seattle/news/2021/08/24/housing-market-covid-19-hedge-funds.html
VMA131Marine
(4,139 posts)csziggy
(34,136 posts)My sister was offered a decent price by a company known for flipping houses. She didn't want to sell to them. So months later for considerably less, she sold the house to a nice couple. The mother is a school teacher, not sure what the father does but he's working from home. Three kids.
The house is great for them because it is in walking distance of elementary, middle, and high schools. Big lot, city park next door. Big house, five bedrooms, three & a half baths, big living room, big Florida room, big formal dining room.
Plus, my sister was happy that they liked much of the decor and will not be changing much in the house, other than the kitchen which we all agreed needs to be gutted and totally redone.
But most people would have just taken the highest bid and been done with it - and I can't blame them. It probably cost us $50k to take the other deal but we are all much happier to see a family get the house for a price that means they could buy it and make the changes they wanted to.
jmbar2
(4,885 posts)Corporate monopolization of something as basic as housing is sickening. It is becoming a luxury good only available to the affluent.
https://www.cnn.com/2021/02/25/tech/zillow-zestimate-cash-offer/index.html
I hope some solutions are out there before it is too late.