Real estate attorney, Zach Roth, has three ways to beat outside investors. Recent data shows outside investors bought 30% of Jax homes for sale in the 4th quarter.
JACKSONVILLE, Fla. — Having a hard time buying a home in Jacksonville? You’re not alone.
But the main source of competition is not your peers on the First Coast, it’s on Wall Street.
Real estate brokerage company, Red Fin, says outside investors bought 30% of Jacksonville homes on the market in the fourth quarter last year.
That’s a 157% increase compared to the previous year.
“Jacksonville is one of the hottest real estate markets in the country for many different reasons,” board certified real estate attorney, Zach Roth, said.
Companies like Open Door are buying houses with cash up front eliminating local competition who can’t afford to do so.
Roth says this has created a lose – lose situation for the average person looking to buy a home.
“Because of the pressure to get the home and that kind of having to overpay and pushing and pushing and pushing try to have the best offer if you’re not careful you can get into a situation where you’ve overextended your means and now your “house poor” so to speak,” Roth said.
So what can you do in order to beat the firms and get your dream home? Roth has a few suggestions:
Lease backs to the sellers:
Roth says offering the seller a short term lease in the home you buy from them can go a long way in securing your home.
“The seller doesn’t want to move out right away, maybe they have to find another place to live maybe it’s just moving is stressful so maybe they just don’t want to do it on the weekend. If you say I’ll give you 30 or 60 days you can stay in the home a lot of sellers that’s intriguing to them…we’re seeing that a lot,” Roth said.
Roth added investment firms don’t want to lose money on the property and would rarely offer a seller a short term lease option. He did say the option comes with certain limitations.
“If you’re using institutional loans, 60 days is going to be your limit that you can let the seller stay in because if you’re doing a primary house loan you have to move in during a certain period in order to qualify for that house loan,” Roth said.
Every home has a story and every buyer wants to add to it, unless you’re a faceless firm. Roth said it could make a big difference.
“A lot of the sellers care about the home they’re selling, they’ve spent many many years in this home and they want to see it cared for like they cared for it. So if you can share a story about yourself and where you’re coming from and what you want to do with this house and why you want this house sometimes that can put you over the top when there may be competition for that home,” Roth said.
Roth said negotiating with the seller and agreeing on an appraisal gap is another way to “outbid” outside investors.
“Basically going to the seller and saying even if this isn’t as valuable as we’re agreeing that it is I’m willing to take some risks (pay more) in an effort to buy this home from you,” Roth said.