HouseHacking Tips in a Seller's Market

[Share Ross]

After helping several house hackers here in Southeast Florida, I thought I’d share some tips on here for any of you getting started with this as your investment strategy. 

These tips are relevant for the times. Meaning it’s a seller’s market so it’s more than the purchase price. You also need STRONG TERMS! 

1. - Escrow. 
2. - Inspection period. 
3. - Closing time. 
4.  -In some cases, closing costs. 
5. - If you’re financed, a VERY reputable lender. 

Let’s assume you fall in love with a house/townhouse/duplex. Let’s pretend that you are Buyer A, and there are two more offers (at least) being presented. 

Here’s what you and your realtor can do to beat them out. 

ESCROW
Sellers look at how much skin you have in the game. When a buyer offers $300k for a property but only puts up $1000 into that initial escrow, your offer is most likely going to be ignored. One of my house hackers got the property because they put $10k in escrow on a $200k deal! That is a strong offer! It’s going to be part of your down payment anyway, so scrape together all the cash you can to win the deal! 

For many deals, you’ll have a second escrow, think big on that number as well. 

INSPECTION PERIOD
It used to be a standard 10 or 15 day inspection period. Shorter is better in today’s battle-for-the-property times. Have your inspector ready to go and commit to a 5-7 day inspection. 

CLOSING TIME
This varies from deal to deal. The key here is one word: Flexibility. Have your realtor ask the seller’s agent when the seller would like to close. If you can match their date, it’s a win/win! They may want to close in 25 days or they may need 45 days. Be willing to go with what they need. 

CLOSING COSTS
In some deals, there are so many offers flying in that you may need to consider paying for some of the seller’s closing costs. This will be a serious discussion with your realtor. If it is a sticking point to get the deal, this is yet another reason to have more cash than you thought necessary to win that deal. 

LENDER
If you’re financed, (all of my house hackers have been financed), then make sure you go with a lender who communicates! Ask your lender to call the seller’s agent as soon as your offer is submitted. They can convey how strong of a buyer you are. I have had deals happen because all the rest of the pieces were in place and then, the seller’s agent was very persuaded by the lender. 

These are all pieces of a puzzle which at times can be quite stressful. Good luck to all the househackers out there!!! Feel free to go over this list with your realtor and can't wait to hear about your successes!