CHARLOTTE, N.C. — Jasmine Parker has lived in her neighborhood for four years and has seen the community change drastically.
What You Need To Know
- One in 3 homes purchased are cash offers
- Groups of investors are coming together, pooling money and purchasing homes
- These cash purchases make it more difficult for homeowners who are financed and need longer to close
She says a lot more renters live in the area than when she first moved in.
Parker is also a realtor, so she’s seeing the effects from the inside as well. She says the increase in renters instead of homeowners is not random.
“Big investment companies have pooled in and they are acquiring properties, different things and essentially making money,” Parker said.
These hedge funds are buying homes, splitting them into multiple family apartments and renting them for a raised price.
For this reason, home buyers are at a disadvantage.
“They’re outbid by these companies” she said.
Parker says the hedge funds come with cash in hand and buy houses quickly while homebuyers have less money and it takes longer.
“They haven’t saved up enough to pay $10,000 over list price or they’re not able to close in two weeks like these companies that are paying cash because they’re financing and a financing deal takes 40-45 days to close,” Parker explained.
Parker says with investors increasingly buying homes faster and with cash, there are things you can do to protect yourself, including saving as much money as possible before embarking on the home buying journey, closing as soon as possible and getting an aggressive real estate agent.