Investors Help Stabilize The Real Estate Market

REALTORS®  are seeing more and more bank-owned properties go into multiple offers. Unfortunately for them, and their clients, many of these properties are sold to investors and not first-time buyers hoping to find a great deal. Many times, banks choose to sell to investors over buyers becuase the investor can make a cash payment. This situation has led to some negative feelings toward investors, especially when they come into an area, buy up a large amount of properties in and don’t use Realtors to relist the properties once they are flipped.

Pat Palmer has another view, and shares why we need good investors in the market:

“We need to have more investors in the market and we need them flipping properties. There, I said it. I know it won’t be long until the riotous crowds start descending on me. But before they do, let me explain. Investors aren’t the scourge of the earth. Well, at least not most of them. They are looking to buy an under-valued asset. No different than a stock or a bond fund. And here’s why investors are helpful in this market: There are hundreds of thousands of REO and short sale properties on the market. Values will not be going up until demand at least equals supply. In the ever-tightening lending markets, investors fill a void by paying cash. It’s very true that they may take a potential buyer out of a transaction, but that buyer should be putting offers in on multiple homes, thereby taking two properties off the market. Investors buy up a lot of the very distressed (read: completely trashed) properties. These are units that, due to health and safety issues, cannot be financed anyway. Investors buy these up cheap, and fix the inherent problems. At this point,the unit has now gone from total disrepair to some form of turn key for a buyer.”

With the amount of toxic assets the banks are holding on to, it may not be a bad thing when an investor can afford to buy homes in bulk. Even though they may take good deals from buyers and commissions from Realtors, the long term goal for everyone is market stabilization. Having investors buy up properties, turn them, and sell them for more than the bank would have will only help that goal.

Click through to read Pat Palmer’s full post.

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