Distressed Properties See Uptick in Prices From First Time Homebuyers

These charts demonstrate the dynamics of price increases in the housing market.

• First-time buyers often focus on potential rather than current condition
• More likely to place emotional value on property features
• Less aggressive in price negotiations
• May overbid in competitive situations
• Often use FHA/VA loans which can support higher valuations

• More likely to accept seller financing or lease-to-own arrangements
• Often willing to work with seller's timeline for moving
• May accept seller-held second mortgages
• More flexible on closing dates and possession terms
• Could qualify for down payment assistance programs that support higher prices

• Accept property "as-is" with proper disclosures
• Focus on future potential vs current defects
• Work through issues collaboratively
• Be satisfied with basic repairs

• Maintain neighborhood property values
• Generate goodwill with neighbors
• Create positive word-of-mouth
• Support community stability
• Help avoid "investor stigma"

• Put more earnest money at risk
• Less likely to renegotiate after inspections
• More committed to closing once under contract
• More willing to work through appraisal issues
• Accept longer inspection periods benefiting sellers

• Provide seller concession opportunities
• Offer tax benefits to sellers in some cases
• Include renovation funding
• Guarantee loan performance
• Streamline closing process

Learn more about the Freddie Mac Home Renovation Program here.

As it stands, first-time homebuyers present a promising opportunity for owners of distressed properties looking to maximize their sale price while minimizing transactional risks. Our team has an extensive list of First Time Homebuyers who are willing to explore the benefits of renovating these less than perfect properties. Keep in mind, that buyers tend to value the property’s potential over its present state, are more likely to accept flexible contract terms, and benefit from government programs that facilitate higher offers and streamlined closings. Contact our team to begin a more secure, community-friendly, and profitable sale.