Written by Louis Wilson on 2019/06/21

Institutional Investors

Purchases of single-family homes by investors at record high.

Large investors have always played an active role in the residential real estate market. These investors can act as stabilizers, buying homes with cash when prices dip and the credit markets tighten. However, they can also act as your competitor when you are trying to buy a home.

Growing competition.

The Wall Street Journal recently ran a piece about the effect institutional investors are having on millennials and first-time buyers. The article highlighted the struggles buyers are going through in the increasingly competitive markets around the US. For example, they interviewed Michael Burnett in Detroit who looked at 25 homes, bid on six of them, and won zero. The Burnett family tried everything to win these bids, including writing heartfelt letters about raising their daughters in the home, but kept losing to cash offers.

Unfortunately, this isn't a one-off story. Many families are struggling to get into the home of their dreams and they are resorting to more than just heartfelt letters. Another common practice is to issue an escalation bid, where your promise to pay a fixed amount above the highest bid the seller receives. When these bids are higher than the home appraises for, buyers are offering to pay the difference out of pocket.

It doesn't have to be this way.

UpEquity's mission is to level the playing field. We use our technology to write firm pre-approval letters that help first-time buyers compete against deep-pocketed institutional investors.

Sources.

The Wall Street Journal: Investors Are Buying More of the U.S. Housing Market Than Ever Before