Real Estate Transactions in an Uncertain Market
The Real Estate market has suffered major transformations since its implosion in 2008. Traditional forms of financing have dried up to all but individuals with substantial resources, good employment history and impeccable credit. This profile does not fit most homeowners today. As a result of this new reality, an increasing number of smaller players, who are able to deploy capital quickly and close transactions in the time frame that is helpful to homeowners, are gaining market share. These companies use a wide variety of tactics to reach homeowners, from old”guerrilla tactics” like bandit sign placed on telephone and electric poles to targeted mailings focusing on niche markets such as out of state owners, empty houses and others. Word of mouth, traditionally not a strong side of established financial institutions plays a significant role in attracting new customers. A homeowner or investor who is able to extract cash from a property which until recently they viewed as lost is liable to recommend the firm that helped them to their friends and relatives.Their low overhead enables them in many cases to be profitable closing a much lower number of deals compared to more traditional Realty Companies.
These firms are able to provide a valuable service to strapped homeowners who do not qualify for financing from traditional sources. They also attract investors who bought property, sometimes outside their home state and are now retrenching and wish to extract themselves from the burden of property taxes, maintenance, tenants and the like.
These firms will send a mobile notary public to their residences and make what many thought would be a “nightmare of a transaction” into a quick and clean closing. There is no need for those folks to travel to the location of the property, and in many cases they are able to cash out on a property they thought lost to the tax authorities.
Due to the dizzying advances in technology nimble firms are able to cover a large geographical area with a very small overhead. Electronic transfer of documents, the ability to hold videoconferencing with homeowners from the comfort of their homes and high quality images from almost any home in the U.S. has enabled them to provide a service for a price low enough to attract homeowners and strapped investors while at the same time enabling them to make a profit.
With the continuing uncertainty about the economy, expect this industry niche to continue to grow and continue to strive to give homeowners unparalleled value, as defined by pricing, speed of transaction and reliability.