Housing costs have been rising far beyond previous affordability norms and those chasing down homeownership are turning to unconventional and creative means of making it pencil out financially. Check out our 4 tips below so that you can acquire more property in 2023!
Seller Concessions
It’s becoming more and more common for seller’s to offer concessions such as credits towards closing costs, cash towards an interest rate buydown w/ the bank along with significant price deductions. In some cases, you can negotiate all three! This is huge since it reduces your overall buying costs tremendously and can be the difference maker in the acquisition penciling out.
Co-Own Property with Friends & Family
“A Zillow survey fielded this spring found that among successful recent homebuyers, 18% had purchased along with a friend or relative who wasn’t their spouse or partner, and 19% of prospective homebuyers intended to buy with a friend or relative within the next 12 months. Co-ownership, co-signers and/or gift funds from family members are great options that will increase your buying power. These are great methods to deploy if you don’t have a lot of cash saved for your down payment or your income doesn’t meet the DTI qualifying guidelines threshold!
Consider Homes w/ Additional Dwelling Units
The record-low mortgage rates of 2020 and 2021 spurred a lot of redevelopment with accessory dwelling units on single family homes. As rental rates continue to grow, many of these homes have a strong potential to yield rental income at or in some cases above the fixed mortgage payments. Consider purchasing a home w/ an ADU so that you can offset your monthly mortgage costs. If you occupy the main home as your primary residences, then you can short term rental the ADU and generate between $2500-4K/month.
Seller Financing
Sales are expected to continue falling as buyers simply can’t afford the onerous combination of towering home prices and high mortgage rates. Home and rental prices have been falling from their peaks over the summer, but they’re still rising year over year. This is the best time to start negotiating directly with the seller to see if they would act as the bank and carry the loan needed to acquire the property. In some cases you can even negotiate a lower interest rate in a downturn market as the overall buyers pool has diminished.
Send us a message if you need help negotiating one of these creative acquisition strategies!