Wisconsin recently topped a list of states where investors are interested in buying properties, which could be bad news for traditional home buyers. The market is already saturated with people looking for homes, while the number of homes has failed to increase with demand. Add in mounting inflation and this increase in companies buying up single-family homes for investors, and you have a market that Rob Stafslien describes as the worst he’s ever seen.
Stafslien is the director of single-family lending at WHEDA, the Wisconsin Housing and Economic Development Authority, which helps people buy homes by teaching them how the process works and how to finance it.
"It is such a different environment today for somebody to try to become a homeowner, not even for the first-time homebuyer, but definitely when you talk about the education process ... budget ... maybe what somebody has to say about for a downpayment," he explains.
Unlike traditional homebuyers, investors are able to make a lot of concessions when buying a home, making it difficult for average homebuyers to compete. Stafslein explains these are often well-funded groups who can pay for a home in cash and don't have to buy a home on contingency. Some companies even waive inspections of homes, unlike traditional homebuyers.
"[These companies] have a lot of capital ... scooping up these houses and not only a house, sometimes blocks of houses; neighborhoods where they're going in and trying to scoop up large numbers of homes to and then fixing them up and renting them out, and maybe not even fixing them up that much," says Stafslein.
He says the key to finding a home in today's market is patience, and not compromising too much to get a house. And a love letter to the property owner never hurts.
He says, "I sold my house two years ago and these people took a picture of their kids underneath this trellis of roses that we had and they said, 'We hope this is our future home.' And you know, we had like 15 offers but the picture of those kids under the trellis ... that did a lot for us."
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