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Real Estate Investors Are Making it Increasingly Difficult for First-Time Home Buyers

Signs of the busy spring home buying are already visible, as more buyers flock the market in hopes of getting their hands on a new house. While first-time homebuyers are already experiencing difficulties finding a home in the market, recent reports show that real estate investors are adding to the burden of first-time buyers.

According to the National Association of Realtors' 2016 Investment and Vacation Home Buyers Report, real estate investors continue to beat first-time buyers because of their qualifications, states Realtor.com. The reports showed that investor buyers had higher incomes than those who are looking to buy a house in the market as a residence.

This means that first-time buyers are having a harder time looking for a house in the market, and much more, winning against investors. Sellers and even lenders are more attracted to real estate investors because they often paid higher down payments, had lower DTIs and higher FICO scores.

Investors continue to win against first-time buyers because these above-mentioned qualifications mean faster closing for the sellers. The publication also notes that the average investor is able to provide a 26 percent down payment (if they will not be paying in cash) while an owner-occupier can only pay an average of 11 percent for the down payment.

More investors are flocking the real estate market because of the increase in the demand for rental homes in the U.S. However, first-time buyers should not be discouraged when competing against a real estate investor.

As previously reported here on Realty Today, there are still ways to win against an investor. One of the ways mentioned is to offer a "slightly over asking price."

If going for a higher asking price is a bit beyond your budget, then you may also get a preapproval or pre-underwriting letter as this will also increase your chances of winning against an investor.


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