For those looking to flip houses now, there’s a distinct advantage to being in the market. As many have heard, the market has been shifting for the past several months. And while that may work for traditional buyers, there are also some advantages you can use if buying a flip property or other real estate investment.
Here are a few changes I’m making regarding offering on properties as we close out 2022 and get into 2023!
Negotiate the Purchase Price
When working in a market with less buyer activity, there are likely fewer showings. Since there are more properties than buyers, sellers may be more motivated to get the home off their hands. This will help you have the upper hand in the negotiation most of the time.
Here are some tips for negotiating in a buyer’s market:
– Know the housing conditions and compatible homes in the area.
– Start at a lower initial offer (but not too low).
– Be prepared with funding.
– Have an inspection.
– Bring in a real estate agent for expertise.
Include an Inspection Period
Bring in a professional to ensure you’ve thoroughly inspected the property. Especially if you’re not comfortable assessing the home, bringing someone in is worth a few days.
An inspection will help you decide if the house is right for you and your goals. An inspector can give you the complete picture of the home, including any potential code issues or repairs needed. Your inception results help you make an offer that makes sense for the upgrades and repairs you may need.
Highlight Your Funding Method
The next tip for buying a flip now is highlighting your funding method. Are you a cash buyer? Using a hard money lender or a private lender? You have an advantage if you’re a buyer who doesn’t have to go through the typical underwriting and approval process.
Avoiding extra time and hurdles to the purchase is attractive to buyers and can help you if it’s coupled with the right offer price.
Need help figuring out how to fund your flip? Check out this blog post.
Request Seller Contributions
When sellers receive multiple offers, they probably won’t be covering any additional closing expenses for the buyer (seller concessions). However, when there are fewer buyers and you are working with a motivated seller, you may get some seller contributions like inspection items or closing costs.
With that said, just because a seller can offer contributions doesn’t mean they will, or if they want to, maybe they can’t. A great way to investigate this request is to research the market and find comps showing seller concessions. Sellers can pay all closing costs or a percentage.
Seller contributions are common but more likely in buyers’ markets.
Include a Quick, Flexible Closing Date
If you’re flexible, you’re helping out the sellers. Closing can be as little as a few days or as far out as ninety days. Longer closing dates can allow for more negotiation for a final offer and can help sellers out with moving out.
While a quick, flexible closing date is a great option, it leaves less time for important things. For instance, if you opt for a “quick close” (e.g., within 30 days or by the end of the month), there’s less time for a home inspection, funding approvals, etc.
A flexible closing date can also make for another way your offer is more attractive than others on the table. Consider this on your next flip purchase if your funding and timeline allow it.
Using these Tips to Buy Flip Properties Now
When the real estate market shifts, adjusting your strategy to buy is essential. Any of these items can be included with a purchase agreement, and if the seller doesn’t accept all of them, they may still work with the offer on some of them. If you don’t ask, the answer will always be no!
Ready to take that next step when it comes to flipping?
I’m opening up enrollment for my House Flip Blueprint course soon!!!! Get on the waitlist here, so you don’t miss out!
Check out my Find Your Flip Course to learn the key steps I use in my business to find the best houses to flip. The course will teach you how to spot potential and aid you in determining your needs and wants in your flip business.
Additionally, I have these helpful resources:
Make sure you have the Fixer Upper Checklist to know which areas are critical to added value in a home.