When did home cash buyer options begin sharing the stage with the traditional realtor process?

A look back in time reveals a lot.

You can look back over time – centuries back – and you’ll see that real estate has been the primary wealth energizer of millionaires worldwide. From another angle, mortgage lenders are in mutual agreement that real estate warrants around 70% Loan-To-Value (LTV) ratios, signifying its rating as one of the least risky assets. Homeowners in cities, towns, and villages throughout the USA have climbed on the bandwagon. Thousands of stories circulate about houses, townhouses, and condos bought and sold ten years later with a doubling of the original investment (helped by the leveraging).

Everything appeared so simple when overviewing the real estate landscape. Follow this process, and the details take care of themselves:

  1. Hire a realtor to guide you to a property that suited your lifestyle, pocket, or investment outlook.
  2. Arrange a mortgage to buy it.
  3.  Live in it or rent it out.
  4. Sell it down the line, again, with a real estate agent’s help.
  5. Realize a considerable capital gain.

The financial crisis changed everything.

That repeatable strategy figured in fine until the 2009 financial crisis. That’s when there was a massive shift in circumstances, helped along by somewhat reckless actions at the turn of the century, namely – an unreasonable complacency colored the activities of banks and mortgage institutions where:

  • Homeowners could apply for and obtain mortgages without providing tax records or proof of income.
  • Poor FICO scores didn’t count you out either.
  • Many properties mortgaged out far higher than 70% LTV (in cases with no equity down or very little).

When the financial crisis hit, it saw numerous respected lenders going belly-up. The event heralded in a flood of properties valued at less than their loan value – commonly referred to as “underwater.” For the first time in memory, the accepted “safe-haven” label real estate carried was severely blemished. The picture looked increasingly bleak, with foreclosures inundating every market in the country and homeowners scrambling to salvage what they could.

One thing was for sure – the storm required a different formula to right the ship. Like the proverbial Titanic, the economists couldn’t turn things around on a dime.

Many homeowners found themselves in a position where:

  • They wanted the house gone quickly to minimize their exposure after signing personally as a backup for mortgages.
  • Delinquent tenants abandoned the premises in their droves, leaving substantial disrepair, blindsiding owners without the cash flow to remedy matters.
  • Aggressive lenders and banks, mandated to clear out the red ink, issued pre-foreclosure orders left, right, and center.
  • The “short sale” became a common term, just a hop, skip, and jump away from the lender’s full-blown repossession.

The home cash buyer was born.

To be clear, and to reiterate, this wasn’t a single-family house here and there. It was everywhere you went, and it’s safe to say it had turned the hard-earned glowing image of real estate investing upside down. The conditions as they prevailed demanded the services of a different kind of operator versus the traditional realtor. On cue, these entities entered the arena, capturing homeowners’ attention in a big way by:

  1. Taking the house off their hands fast with an offer inside of twenty-four hours and closing the deal within seven days!
  2. Negotiating liens on the property down to cents in the dollar in most instances.
  3. Coming to a resolution that was mutually acceptable to the homeowners and their lenders.
  4. Not allowing the following to obstruct the process:
  • Poor curb appeal
  • Unsightly aesthetics
  • Repairs

Also, not disadvantageously weighing them into the calculations, as would homeowners looking for their next dream home.

  1. Conducting a home inspection before making an offer, thus removing contingency uncertainty after presenting it (i.e., the realtor methodology)
  2. Making it an unshakeable cash offer free of degrading lender appraisals that were killing many deals during these difficult times.
  3. Erasing show days, staging, and decluttering from the equation. Looking past those things with a professional real estate operator’s eye.
  4. Finally, eliminating extra fees, and the 6% agents’ commission. It helped the homebuyer get to a bottom-line value that made sense.

Everything you see above in items (1) through (7) describes the home cash buyer’s distinctive approach that separated them from realtors. They made a grand entrance and didn’t fade away. Probably the most significant negative in the early stages revolved around “opportunists” – taking advantage of sellers’ weaknesses. However, as competition in the home cash buyer arena intensified, the legitimate contenders with balanced strategies emerged strongly.

Home cash buyers like Home Buyers Birmingham thrive to this very day.

The financial crisis has dramatically subsided, but the home cash buyer’s role, if anything, has strengthened. Their client base has expanded out to include:

  1. Investors with broad portfolios wanting to sell an underperformer quickly.
  2. Divorcing couples trying to untangle real estate holdings with speed.
  3. Inherited properties where families want speedy property liquidations.
  4. Stressed homeowners with:
  • Problematic tenants
  • Houses they can’t get show-ready
  • Urgent cash needs that can’t wait through a realtor’s two-month (on average) process.
  • Mortgage payments falling in arrears.
  • Liens on the home mounting up.
  • Urgent company transfers
  • Illness or disability in the family

The Pandemic crisis has fueled all of the situations cited above, making home cash buyers like Home Buyers Birmingham in Alabama a valuable resource to many. With commission costs and mortgage closing fees removed, a reputable company like Home Buyers Birmingham can deliver options that make real estate transactions a breeze if the circumstances are right.

Home Buyers Birmingham
1821 11th Avenue South Suite #55331
Birmingham, Alabama 35205

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When did home cash buyer options begin sharing the stage with the traditional realtor process?

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