A new seller’s market is beginning to sweep the country and if you aren’t prepared for it your real estate investing business may be about to come to a sudden halt along with your cash flow…
If you heard investors complaining as the housing market fell you are about to hear a lot more whining as the easy days of cherry picking only the properties with the hugest spreads from thousands becomes a thing of the past and getting great discounts becomes a mission. If the seller’s market hasn’t hit you yet buckle up because it is on its way.
Markets like Miami which have been the hottest for real estate investing recently posted record sales in 2011 which even out performed the peak of 2005. Things aren’t slowing down as sales and prices continue to pick up and agents throughout South Florida report it is definitely a seller’s market there already. The same can be said of Silicon Valley and other parts of the country.
For those newer to real estate investing and who didn’t experience investing in the boom years be prepared to work a lot harder. There will still be plenty of money to be made in the coming years but a seller’s market definitely has both its pros and cons. Yes, it will be easier to sell and there will be more buyers for the homes you are flipping but putting properties under contract will get a lot tougher very quickly. Many agents are already reporting it isn’t worth making offers that aren’t at least s high as the asking price while some banks aren’t accepting offers on their REOs if they are contingent on an inspection being done.
What do real estate investing pros need to be doing to strengthen themselves and prepare for a seller’s market? Tighten up your offer and bidding processes and systems, get coaching to improve your negotiation skills, build your brand for more negotiating power, be ready to move fast and develop relationships so that you get the first shot at deals as they become available. Finally, get the best lenders and mortgage brokers on your side as financing is going to make all the difference in who gets the max price for their homes and wins the most buyers in the frenzy that is brewing.