{"id":4718,"date":"2023-01-02T03:55:43","date_gmt":"2023-01-02T03:55:43","guid":{"rendered":"https:\/\/imsfund.com\/?p=4718"},"modified":"2023-01-02T03:55:43","modified_gmt":"2023-01-02T03:55:43","slug":"how-to-win-big-as-a-buyer-in-these-market-conditions","status":"publish","type":"post","link":"https:\/\/imsfund.com\/index.php\/2023\/01\/02\/how-to-win-big-as-a-buyer-in-these-market-conditions\/","title":{"rendered":"How To Win Big As A Buyer In These Market Conditions"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div :class=\"{ 'hidden': $store.proContent.showFullPrompt() }\">\n<section class=\"px-4 relative border border-slate-200 mobile-toc lg:hidden\" x-data=\"{open:false}\"><button class=\"flex items-center gap-4 my-2 border-none w-full\"><br \/>\n<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"h-6 w-6\" fill=\"none\" viewbox=\"0 0 24 24\" stroke=\"currentColor\" stroke-width=\"2\"><path stroke-linecap=\"round\" stroke-linejoin=\"round\" d=\"M4 8h16M4 16h16\"\/><\/svg><\/p>\n<h2 class=\"font-semibold text-slate-800 text-base m-0 js-toc-ignore\">In this article<\/h2>\n<p><\/button><\/p>\n<\/section>\n<p><span data-preserver-spaces=\"true\">I bet you\u2019ve heard people say, \u201cI\u2019m going to wait to buy when housing prices start going down\u201d more than once over the last couple of years. Well, guess what? Housing prices are decreasing, but we aren\u2019t seeing an influx of new buyers. Many of the same people who were waiting for housing prices to fall are now saying, \u201cInterest rates are too high. I\u2019m going to wait for them to go back down.\u201d\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Many people will continue waiting for market conditions to be absolutely perfect before they consider buying. The problem is that market conditions will never be perfect. It\u2019s very rare that you\u2019ll ever find a perfect deal. Buyers find great deals when they are actively looking for them. Over the last few years, the economic opportunity was to outmaneuver the competition of multiple bidders to get a home under contract at a historically low interest rate. Now, times have changed.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">If you want to get off the sidelines, here are four ways buyers are winning in this current housing market.<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">Negotiate<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Every real estate investor I know agrees that there hasn\u2019t been a better time to negotiate in years! From the beginning of the pandemic through Summer 2022, it was an extreme seller\u2019s market induced by record-low interest rates. When sellers told us to jump, the response was \u201chow high?\u201d Now, the tables have turned. Buyers have the power, especially if a home isn\u2019t listed in great condition.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Here\u2019s what you need to snag a great deal.<\/span><\/p>\n<h3><span data-preserver-spaces=\"true\">Know your goals<\/span><\/h3>\n<p><span data-preserver-spaces=\"true\">Having goals that guide your decision-making is key when looking for a property. Whether that\u2019s\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/cap-rate-real-estate\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">cap rate<\/span><\/a><span data-preserver-spaces=\"true\">,\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/cash-on-cash-return\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">cash-on-cash return<\/span><\/a><span data-preserver-spaces=\"true\">, or cash flow, setting goals will guide you in the home search and negotiations. A strategy I\u2019m helping my investor clients utilize is looking for properties that will break even and pay for themselves, and then how much the property would cash flow or return after a refinance opportunity in the next few years.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">If you can get a property at a significant discount now, let it pay for itself, and then get a cash-on-cash return of 10% plus after refinancing at a 5% interest rate (which is conservative), I\u2019d encourage you to strongly consider such properties. Upon refining your goals, you begin to ask, \u201cwhat do I need to purchase this property at for it to be a great deal?\u201d rather than simply seeing how much of a discount you can get on a property you like.\u00a0<\/span><\/p>\n<h3><span data-preserver-spaces=\"true\">Find an investor-friendly real estate agent<\/span><\/h3>\n<p><span data-preserver-spaces=\"true\">It all starts with getting a great <a href=\"https:\/\/www.biggerpockets.com\/agent\/match\" target=\"_blank\" rel=\"noreferrer noopener\">real estate agent<\/a> who can help you identify deals in line with your goals. A crafty agent will see the potential to find a property listed outside of your search criteria that fit your purchase price and meet your goals. An agent who can see possibilities, run numbers on your behalf, and pick up the phone to try to put a deal together can help you create a lot of wealth in this market.\u00a0<\/span><\/p>\n<h3><span data-preserver-spaces=\"true\">Look for distress<\/span><\/h3>\n<p><span data-preserver-spaces=\"true\">I look for listings in markets like these that other buyers may overlook because of specific factors. Some listings are passed over because of obvious things: the home is in bad shape, has a weird layout, has structural issues, etc. What I\u2019m looking for is a little more subtle. Are the listing photos bad? Is the listing description bad? Is it back on the market after a recent purchase, making others think something must be wrong with it? Are the days on market high? Is it simply overpriced? All of these factors can lead to a home sitting, not getting offers, and open up opportunities to negotiate with the sellers of these properties.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Implementing these criteria into your property search will lead to opportunities to negotiate and land great deals. I\u2019ve had the opportunity to negotiate over $100K off of multiple properties in the last few months, but the goals of my clients have guided those negotiations. Get your goals together and get ready to negotiate hard to land a great deal!\u00a0<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">Creative Financing<\/span><\/h2>\n<h3><span data-preserver-spaces=\"true\">Concessions<\/span><\/h3>\n<p><span data-preserver-spaces=\"true\">Negotiating seller concessions is an extension of the negotiation tactics listed above. Many sellers have circumstances that implicate them to sell their property. In this market, many sellers will have to make concessions to sell. Negotiating these concessions is another great way you can make a deal work. You can get a property under contract closer to the seller\u2019s listed price and plan to bring them down during the inspection period.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">If you find unsatisfactory inspection items (which you can be very liberal on what constitutes an unsatisfactory item), you can negotiate with the seller to give you concessions towards closing costs. Those closing costs can be used to actually pay closing costs (lender and title fees), or you can use those concessions to pay down the interest rate of the loan or pay for a temporary buydown.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Many buyers are utilizing\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.investopedia.com\/terms\/1\/2-1_buydown.asp\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">2-1 buydowns<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0these days, which means you buy down your interest rate by 2% for the first year and then have it increase by 1% for the next two years until it reaches the original market rate. Of course, if you can time these right, you could wind up paying the reduced rate long-term if rates come down within three years and you refinance.\u00a0<\/span><\/p>\n<h3><span data-preserver-spaces=\"true\">Assumptions<\/span><\/h3>\n<p><span data-preserver-spaces=\"true\">Another way buyers are winning in this market is by assuming seller loans.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Rather than getting a new loan on a property, as the buyer, you can assume the current property owner\u2019s loan. The buyer goes through an application process with the seller\u2019s mortgage provider to assume the loan, and the transfer is made if approved.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">In almost every case, there is a sizable difference between the seller\u2019s listing price and their loan balance. The easiest way to cover this difference is with cash. Where assumable loans get tricky is if a buyer doesn\u2019t have enough cash to cover the difference between the purchase price and the loan balance. Each lender sets their own rules on how they would go about this. Some will allow a second or \u201cjunior\u201d loan, but they set the rules on if it would have to be with them or from another lender.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">That said, many properties were purchased or refinanced in 2020 and 2021 and have locked in low interest rates. If a buyer can assume a loan at 3%, that is a huge win. Crafty real estate agents will know the questions to ask sellers to see if the loan can be assumed. Many sellers also list their homes with the loan being assumable in the listing description. A simple keyword search with \u201cassumable\u201d on Zillow or Redfin will give you access to homes with assumable loans on the market.\u00a0<\/span><\/p>\n<h3><span data-preserver-spaces=\"true\">Seller financing<\/span><\/h3>\n<p><span data-preserver-spaces=\"true\">Seller financing is also on the rise. Rather than going to a lender or bank to acquire a loan, a seller can give the loan to you. This can create a win-win situation because sellers can stop managing a property and create a passive income stream. They also have a good chance of getting the price they want if they can produce favorable terms for the buyer. Buyers have the opportunity to negotiate terms they wouldn\u2019t otherwise be able to, like the down payment and interest rate.<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">House Hacking<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">House hackers always win, but they are especially winning in this market. Any other individual or couple buying a primary home has to pay a much higher monthly payment due to interest rates. Fewer homes sold equals more inventory, more days on market, and more opportunities to negotiate on the front end of purchasing a home.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">House hackers can get into a home for a much better price in this market. Although their monthly mortgage payment will be higher because of high interest rates, they can mitigate that payment with the income they produce from renting out part of their home.<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">New Builds<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Builders are desperately trying to unload their inventory as they see the market continuing to decline until mortgage rates reverse. Over the past couple of years, going through a new build process was insane. In some cases, buyers had to put down deposits to be on a waitlist, and builders would reserve the right to increase the price of your home if the market appreciated.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">You could not negotiate prices or terms. Now the tables have turned! To get these homes off the books, builders are slashing prices and giving massive credits through their in-house lenders to market lower interest rates. Buyers can negotiate the price as well. I have buyers set to close on a new build this month at $90K less than the original listing price and at a fixed 4.5% promotional interest rate!<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">The market has certainly changed in the latter half of 2022, but real estate investors always look for opportunities that any market presents, and there are plenty of opportunities in this new environment. I hope these strategies will inspire you to win on your next purchase!<\/span><\/p>\n<div id=\"hero-block_62df1a82bfc88\" class=\"first:mt-0 hero-block    has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n<div class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n<div class=\"relative z-30 w-full \">\n<main class=\"py-4\"><\/p>\n<p class=\"has-slate-800-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Find an Agent in Minutes<\/p>\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:16px\"><strong>Match with an investor-friendly real estate agent who can help you find, analyze, and close your next deal.<\/strong><\/p>\n<ul class=\"has-slate-800-color has-text-color\" style=\"font-size:16px\">\n<li>Streamline your search.<\/li>\n<li>Tap into a trusted network.<\/li>\n<li>Leverage market and strategy expertise. <\/li>\n<\/ul>\n<p><\/main><\/div>\n<div class=\" first:mt-0 relative h-full lg:flex lg:items-center\">\n<picture decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  shadow-xl rounded-md hidden lg:block sp-no-webp\" title=\"How To Win Big As A Buyer In These Market Conditions 2\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Agent-Finder-Block-2.webp\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Agent-Finder-Block-2.png\" type=\"image\/png\"><img src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Agent-Finder-Block-2.png\" decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  shadow-xl rounded-md hidden lg:block sp-no-webp\" title=\"How To Win Big As A Buyer In These Market Conditions 2\" alt=\"find an investment-friendly real estate agent\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Agent-Finder-Block-2.png\"\/><\/source><\/source><\/picture><\/div>\n<\/div>\n<\/div>\n<p class=\"italic\"><b>Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n<\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.biggerpockets.com\/blog\/how-buyers-are-winning-in-this-market\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In this article I bet you\u2019ve heard people say, \u201cI\u2019m going to wait to buy when housing prices start going down\u201d more than once over the last couple of years. Well, guess what? Housing prices are decreasing, but we aren\u2019t seeing an influx of new buyers. Many of the same people who were waiting for [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":4719,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"fifu_image_url":"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/12\/buyers-winning-1024x517.jpg","fifu_image_alt":"","footnotes":""},"categories":[9],"tags":[],"class_list":["post-4718","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/4718","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/comments?post=4718"}],"version-history":[{"count":1,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/4718\/revisions"}],"predecessor-version":[{"id":4720,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/4718\/revisions\/4720"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media\/4719"}],"wp:attachment":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media?parent=4718"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/categories?post=4718"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/tags?post=4718"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}