Smaller towns now feel the crunch of bidding wars, often losing out to investors
“Cash is king” may sound lovely to home sellers, but buyers with stars in their eyes over snapping up a hunk of the American Dream right now are not happy. Frustrated homebuyers ready, willing, and able to make your house a home for themselves in small-town America (where bigger city folk are moving to in greater numbers) are increasingly losing out to all-cash offers either by buyers willing to do just about anything for a winning bid or investors betting on flipping or renting houses out for a profit.
Realtor Magazine cites an example of a buyer from Bethlehem, Pa. who, together with his fiancé, had viewed more than 50 houses and made more than 20 offers on houses over nine months. Constantly getting outbid, despite bidding above the asking price, the couple even tried waiving their right for a home inspection. But to no avail, as they were told that there were 14 other bids and they had lost out again.
The Wall Street Journal reports that small-town America sees the same bidding wars that have become the norm for most markets. “Local home buyers are finding themselves increasingly up against investors, who comprise about a fifth of annual home sales nationwide,” they say. “Investors are being drawn to smaller towns because home prices and taxes tend to be lower. The cash flow opportunities in buying properties to rent them out may be greater than in the city.”
Individual home buyers often can’t compete with all-cash offers that are willing to waive inspections and have cash in the sellers’ pockets in record time, all without those investors or buyers ever having stepped foot into the property. RealtorMag admits that buyers are feeling the pressure to make quick decisions if they are to have any shot at competing, waiving inspections in their bids, and making other concessions. The downside for buyers has them potentially setting themselves up for disappointing discoveries down the road. However, if the point is to simply buy a home, they often feel they have no choice.
Source: Realtormag | TBWS
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