With the roaring housing market of the late 2010s/early 2020s, it should come as no surprise that many home owners opt to sell their homes on the open market, even distressed properties not suitable for an owner occupant. The current housing market has allowed real estate agents to promise multiple offer situations and high selling prices due to low inventory, but what they fail to acknowledge is the hassle and headaches that are often hidden behind these “highest and best” offers. Increasingly stricter building codes and home inspectors and are turning cosmetic issues of the past into seemingly hazardous defects that oftentimes lead to dead deals and longer days on market. After the cost of unnecessary repairs and realtor fees, retail sellers find themselves at a loss or with highly reduced profit margins. The silver lining of the increasingly stressful retail real estate market is the wholesale market that it opens up for investors. Just as the shortage of inventory has driven up the cost of homes on the retail market, it also increases the price investors are willing to pay, and after the headache of repairs and commissions, the wholesale market has become a more suitable option for home sellers anticipating a fair price with minimal headaches.
Beginning around 2016, the housing market has seen great strides since it last crashed around 2009. Once again homes are going into multiple offer situations and bringing well over list price. New construction is popping up all over the place and flipping has become the new wave as trends seen on HGTV seem to be implemented into every refurbished home. With such great housing demand, not even a historic pandemic could crash the market. The historically low interest rates brought on by COVID-19 have accelerated home buying as buyers can now obtain a higher approval than usual. Based on the current situation of the housing market it would seem as if paying six percent is worth the extra exposure the open market provides, but there’s a new trend real estate agents fail to mention at listing appointments.
Just as the real estate market has picked up, so has the home inspection industry. Now real estate agents representing buyers seem to be in a competition to see who can recommend the most negative home inspector, even when the house is in fairly great standing. An agent practicing real estate locally had an encounter when representing sellers that saw a home inspector accuse the work of their contractor as being hazardous when other building experts have confirmed the work was up to code; as a result the buyers unreasonably asked for a twenty-five thousand dollar price reduction to move forward with the purchase. The deal inevitably fell through and the house went back on the market. This local realtor is not the only agent to deal with this ridiculous negotiation strategy as real estate agents are increasingly adopting this negotiation tactic to get the deal when there are multiple offers. By submitting the best offer and then asking for a considerable price reduction, agents hire an inspector to make a mountain out of any molehill sized defect, and refuse to close without their unreasonable demands met. According to Homelight.com defects inspectors particularly search for consist of the ground sloping toward the home, issues concerning plumbing, rotting wood, electrical, radon, asbestos, lead based paint, mold, HVAC, etc. When trying to sell a less than perfect home on the market, especially an inherited or vacant property, many of these issues will surface on a home inspection, even if they are minimal. As deals continue to die, sellers have began turning to a more upfront approach to selling where they accept an offer that stays the same despite any known defects and as a result, they get to the closing table quickly and without any headaches.
To avoid the unreasonable requests of many buyers brought on by their ambitious agents, sellers are flocking to investors who buy their homes quickly for cash at a discount. By accepting a cash offer at a discount, sellers can be sure that the price which they’ve been offered is a legit cash offer and not to be followed by a ridiculous request for a massive price cut due to a less than knowledgeable home inspector. Helpful Homes LLC is operated by one of these reputable investors. Even as we don’t pay retail prices, we buy homes at a fair market value in any condition and follow up all of our written offers with a proof of funds so the sellers know the cash is there. Instead of requiring 30 days of due diligence and closing in the weeks following, Helpful Homes can close in 30 days if not before.
Today’s real estate market is a lucrative business with a false light. To most sellers it seems as if throwing their home on the local MLS and sacrificing just six percent will promise significant returns, but that is far from the truth. Increasingly strict home inspections are turning homes in hardly less than perfect condition into apparent money pits to potential buyers. Instead of jumping on the bandwagon of “multiple offer situations” and today’s historic home values, educated sellers are first consulting investors to get a fair price for their property that is guaranteed at closing instead of immersing themselves into the rat race of due diligence periods and renegotiation tactics.