By KIMBERLEY HAAS
Leaders at an online marketplace that connects property investors to homeowners selling as-is say their platform gives both parties more certainty during the process.
People who have houses that are vacant, damaged from natural disasters, or have structural issues can be sold on the Sundae marketplace, but any number of potential sellers may benefit from the company’s services, according to Shaun Greer.
Greer is the Senior Vice President of Revenue at Sundae. He recently sat down for an interview with The Mortgage Note.
Greer said they have about 22,000 investors who are interested in purchasing “homes that need love.”
“What Sundae does is partners with the homeowner and says, ‘Hey, we are going to get you the highest value for your property and we have investors compete at auction for the purchase price,'” Greer said.
The showings are virtual and an inspection is performed even though the house is being sold as-is. Greer said a typical closing takes about 35 days.
“We have a very unique product and homeowners love it. They don’t have to clean up their house at all. They don’t have to invest in their property at all to sell, and it is sold as-is,” Greer said.
Investors are looking for properties that they can make a return on if they put some sweat equity into them, Greer explained.
The average home sold on the marketplace sells for $375,000, but Greer said that depends on the location.
Sundae operates in 16 major markets, including the Los Angeles metro area.
“We do properties in Orange County anywhere from $650,000 up to $2 million,” Greer said.
In 2021, investors disrupted the housing market by putting cash down on homes.
Real estate investors bought 80,293 properties in Q4 2021, a record 18.4% of homes sold.
More than three-quarters of homes bought by investors – 75.3% – were all-cash purchases.
Although the market has cooled since June, investors are still snatching up available properties.
According to a report published by the National Association of Realtors on Oct. 20, in September of this year, individual investors or second-home buyers purchased 15% of homes.
Many investors purchase homes to flip them.
Data collected by ATTOM shows that 115,198 single-family houses and condominiums in the United States were flipped during the second quarter of 2022.
Those transactions represented 8.2% of all home sales in the second quarter, or one in 12 transactions.
The gross profit on typical transactions hit $73,700, up 10% from $67,000 in the first quarter of 2022 and up 10.1% from $66,944 in the second quarter of 2021.
“The second quarter was another strong showing for fix-and-flip investors. The total number of properties flipped was the second-highest total we’ve recorded in the past 22 years, and the median sales price of a flipped property – $328,000 – was the highest ever,” Rick Sharga, Executive Vice President of Market Intelligence for ATTOM, said in a statement.
Greer said with so much at stake, homeowners need someone to guide them through the process.
“It’s important to have someone on your side,” Greer said. “It’s a complex transaction.”
Greer said homeowners considering selling as-is should solicit multiple offers because there is the potential of earning between $50,000 and $200,000 in many cases.
“That is life-changing money for many people,” Greer said.
Sundae recently rolled out a new program.
Purchase Direct allows investors to commit immediately to buying a property at an advertised sell-now price set by the owner.
Leaders at the company say that investors who use Purchase Direct will have more certainty, will save time, and will face less competition because if they are the first to click on the property, no other investors are involved.
“Purchase Direct gives property investors a fast way to acquire properties while our sellers stay in control of the price that’s set. It’s really a win-win,” Josh Stech, CEO and Co-Founder of Sundae, said in a statement.
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