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Investor’s cash trumps in house hunt

By Allen Norwood
Allen Norwood
Allen Norwood writes on Home design, do-it-yourself and real estate for The Charlotte Observer. His column appears each Saturday.

Investors don’t seem to be snatching up quite as many houses in the Charlotte area as they did a few months ago, real estate pros say. That’s good news for first-time buyers, or any buyers competing for a limited supply of homes.

It’s not a fair game: When a conventional buyer offers $150,000 for a home – with 20 percent down, along with inspection and appraisal – and an investor offers the same amount in cash with no conditions, the investor trumps.

Tanya Garner, an Allen Tate agent who has seen her buyers lose homes to investors, thinks investor interest has slowed. “Before, we might expect to get an offer in a day (on a distressed, $150,000 house),” she said. “Now, it’s not so heated.” Fellow Tate agent Martina Linford agrees.

Garner works in the Huntersville office. Linford works in Ballantyne. Both have helped first-time buyers negotiate against investors.

This will give some idea of what their clients have been up against.

A story in the Observer in September reported that 20 percent of the homes in the Charlotte area were bought by out-of-state investors, according to a survey by RealtyTrac. Wall Street-backed investors have been targeting distressed and non-distressed homes, especially homes in decent condition priced at about $150,000.

In Mecklenburg and Cabarrus counties, the percentage was even higher. From May to July, the period studied, investors bought 25 percent of homes.

Often, first-time buyers have to lose heated bidding contests to fully appreciate what they’re up against.

They’ll think they can make low offers, the two agents said, and anxious sellers will accept.

“Even if the investor is offering a little less, say $145,000, it would be a better offer,” Linford said.

Very often, investors don’t ask for appraisals or inspections. Also, investors can close in as little as 10 days.

Linford and one of her clients, a first-time buyer, found a bank-owned property and made a decent offer. The client had 20 percent down and good credit. But the bank accepted a cash offer.

Buyers with minimum down payments are even less able to compete. “Absolutely,” Linford said.

After lots of searching, Linford and the client found another bank-owned property. “I made her understand, rather than thinking she could offer less, she had to make ... her best offer,” Linford said. The client got that house.

She said all buyers, when competing with cash-only investors, just have to be “flexible, patient and persistent.”

Special to the Observer: homeinfo@charter.net
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