INVESTOR BUYERS AND SELLERS ARE IMPORTANT IN ANY REAL ESTATE MARKET.
Why do investor buyers and sellers and their agents take offense at the term "Bottom Feeders"?
The term "bottom feeders" is not a negative. Fishing for the bottom feeders of the waters is simply opportunistic when the game fish are either not in season, not rising to the lure or the fisherman fishes for food. Bottom feeding fish are needed in bodies of water and bottom fishing investor buyers are needed in real estate markets.
Representing investor buyers and sellers is a specialty that is not suited for many agents or brokers. It's the difference in brokering the sale of properties vs. brokering the sale of homes.
That's not negative, just different.
An investment buyer calculates at the return on their investment. They estimate the maintenance costs for a period of time. Investment buyers calculate the future value of a property.
A home buyer considers how their furniture will fit in the home. They estimate how the mortgage payment will fit in their budget. Home buyers consider their life style when viewing a home.
NOTHING NEGATIVE ABOUT EITHER, JUST DIFFERENT.
Consider the foreclosures on the market today, many in poor condition due to neglect of the part of the former owner and the present bank/HUD owner.
CONDITION OF PROPERTIES FOR SALE AND THE DIFFERENT PERSPECTIVES OF INVESTORS OR HOME BUYERS
Investment Buyers Buy, Rehabilitate and Sell Inventory
Condition
- Investor buyers are often financially able to pay cash for homes without consideration for appraisals or condition.
- Home buyers rely on financing to buy homes, home inspections to avoid future costly repairs and are not often in a cash position to make upgrades after closing.
Decor
- Investor buyers consider the condition of the carpets and floors.
- Home buyers consider the color and decorating value of carpets and floors.
Location
- Investor buyers consider the location for transportation convenience.
- Home buyers may consider location of home for proximity to family.
Inventory
- Investor buyers buy homes that no one else will and help move inventory.
- Home owners are looking for life style and ambiance and "move in" ready homes.
Pricing
- Investment owner sellers look at the numbers and will entertain prices lower than home owners.
- Home owner sellers are often not objective about the value of their property.
Business Opportunity
- Investor buyers and sellers represent repeat and multiple unit transactions for agents.
- Home buyers buy and sell on average about every 7 years.
WELCOME THE "BOTTOM FEEDERS". Investor owners bring balance to the market by offering rental properties to folks who are unable or unwilling to buy. Investor sellers often buy properties in bad repair and make them attractive for first time home buyers and moderate income home buyers.
NOTHING NEGATIVE, JUST DIFFERENT.
ADVICE TO AGENTS. Many so called "investor buyers" are simply consumers looking for the impossible dream. Choose your clients carefully. If an "investment buyer" isn't cash or financing ready, save your time. Financing investment properties for novice investors is not what it once was. Also, the price between what investor buyers and home buyers will pay for properties isn't much different. The consumer who watches late night TV and thinks that they can buy foreclosures for $300 . . . . well, you know.
Fannie to Expand Mortgage Rules for Real Estate Investors This information provided by Rich Bouchener. Thanks Rich. I read this a few days ago and then couldn't find it.
Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988, E-Mail.
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