With so much talk about increasing competition for homes and bidding wars, real estate investors who aren’t receiving multiple offers on their deals might wonder what they are doing wrong?
According to recent stats, including the latest numbers from the California Association of Realtors we are now seeing more multiple offers on homes than we have in over 6 years. So if you aren’t getting multiple bites on your properties for sale what are you doing wrong?
While the figures show that the U.S. housing market is getting dramatically better there continues to be much disparity in marketing times for homes, even in the same neighborhoods. Some have been sitting on the market for more than a year, while others sell in just a couple of days.
The obvious main difference in how long a property takes to sell and how many offers a new listing generates is pricing. Too few offers suggest the price is too high or at least not enough visibility. Too many offers on the other hand might suggest the price is too low and profit is being left on the table.
However, when flipping houses generating multiple offers isn’t just about options or selling quickly; purposely pricing low to create a frenzy and bidding war can actually result in a higher sales price and net profits.
Still, investors flipping houses must remember to watch the most important factors, not just the top line ‘purchase price’. Why? Because it doesn’t matter what this number is unless the deal actually closes, closes on time and actually funds.
In the current mortgage lending environment and with so many new real estate investors jumping into the game sellers must be vigilant in vetting potential home buyers and who they contract with or pay the price.