The real estate market is always in flux, but it’s possible to take advantage of trends in the moment. Right now, that might mean selling a property to gain a profit from the higher sales prices or taking advantage of low mortgage rates to buy property. House hunters that understand what’s going on in the current market have an edge over those who are not paying attention.
The State of the Real Estate Market
The real estate market is currently being driven by a number of factors. A shortage of inventory has caused a shift in favor of sellers. Meanwhile, record-low mortgage rates are prompting both first-time buyers and savvy investors to search for properties. A third factor—people relocating because they can now work remotely—has caused even more volatility than usual. Another factor is that those who are holding essential jobs and thriving as remote workers have less opportunity to spend on dining out, travel, and other activities, and are now sitting on cash and ready to purchase.
The combination of these factors is sparking predictions for the future that include:
- 7% growth in sales volume
- 5.7% increase in sales prices
- A slow increase of mortgage rates
Real estate professionals are assuming that the market will likely remain seller-friendly, which means that if you want to build your real estate portfolio, your offer has to be competitive. For sellers, this might be the time to reap the profits from your previous investments.
Hard Money Loans for Sellers
If you have properties to sell, the time is ripe for getting a great price. However, if you want to optimize your profits, it might be worth making a few improvements to get a better sales price. Unfortunately, it’s increasingly difficult to secure a bank loan in the current climate.
If you need cash to make improvements, consider using your equity to get a hard money loan. You can get quick cash to improve your property and take advantage of the current market conditions, pay the loan with proceeds from the home sale, and possibly make a profit. There are no prepayment penalties so the sooner you can use the cash to make improvements and sell the property, the more you can keep in your pocket.
Hard Money Loans for House Hunters
If you’re a real estate investor, hard money loans broaden your possibilities. Distressed properties are on the rise as homeowners can’t keep up with mortgage payments and although there is currently a moratorium on evictions and foreclosures, these conditions won’t last forever and lenders will eventually stop offering delays or forgiveness. On the plus side, financial distress due to recent economic conditions isn’t necessarily a reflection of the quality of the property, and many homes need little or no improvement.
In a competitive market that favors sellers, cash is king. Yours won’t be the only offer, so do what you can to sweeten the deal. A hard money loan is as good as cash, so you can make an enticing offer to the seller. In many cases, closing can occur in five days or less. When you combine a cash deal with a fast close, your offer will likely rise to the top, even if it isn’t the highest.
If you have equity, you can often get a hard money loan even if you can’t get a bank loan. Approval for a hard money loan is based mostly on equity and less on credit history. Hard money lenders are also able to provide loans for properties that banks will reject. Whether you plan to fix and flip or buy and hold, the current market presents opportunities for house hunters.
Socotra Capital Loans for House Hunters
Socotra Capital offers hard money loans for residential rehab, fix and flip, and short-term rental properties. If you want to be a competitive house hunter, you need quick access to cash, and a hard money loan is significantly faster than a conventional mortgage. If you’d like to learn more about your financing options beyond conventional banks, check out our Borrower’s Guide for details.