With 30,000 investors browsing the site each week and more than $1 billion in property transactions since its inception in March 2016, the Roofstock marketplace is becoming increasingly competitive. Attractively-priced homes in desirable markets tend to get snatched up shortly after they're listed, and sellers often consider multiple offers. To boost your chances of sealing the deal, we’ve compiled 10 tips for each major phase of the investing journey.
1. Start with a conversation. Our team of advisors can walk you through the bidding process, point out some of Roofstock's most popular tools, answer any technical questions, and help you identify your investing goals. Having this conversation before you make an offer can be a great head start toward submitting a winning offer.
2. After you register (for free!) on Roofstock.com and set up your investor profile, visit the marketplace to create some custom filters with your investment criteria. You can filter by qualities such as monthly rent, price range, property size, location, cap rate, Neighborhood Rating, and much more. You’ll receive notifications as soon as properties that closely match your preferences become available.
3. If you have more capital to invest and want to exercise your negotiating power, consider a Roofstock portfolio. These are groups of homes (ranging in size from two properties to 1,000) that are sold as a bundle and come with the advantages of diversification and certain economies of scale. Portfolio sellers may be more willing to negotiate price, and title costs can be lower.
4. Get pre-approved for financing. A majority of the investment property purchases on Roofstock are financed (learn more about the benefits of leverage here). A pre-approval letter could help your offer be perceived as stronger compared to an offer without one, and it could also help expedite the closing process.
Tip: Roofstock partners with best-in-class lenders to help make financing as easy as possible for investors. You're free to work with your own lender, or use one of ours.
5. Fully vet the property before you submit your offer. Once an offer is accepted on the Roofstock marketplace, the marketplace fee (equal to 0.5% of the purchase price or $500, whichever is greater) will be charged to your credit card. You will have 48 hours to sign the Property Sales Agreement (PSA) to finalize the deal. Make sure you are committed to this property before making the bid, and comfortable signing the PSA within this timeframe. To help streamline the vetting process, Roofstock provides transparent information and resources for evaluating each home and neighborhood on its marketplace.
Making the offer
6. Be realistic. The properties listed on Roofstock typically sell very close to list price. Frequently, an unrealistic offer can be the quickest way to get eliminated from the pool of potential buyers — especially in competitive situations.
7. Think like a seller. The highest offer isn't always necessarily the best offer. For example, offering all cash means no loan qualification, no loan shopping and no loan processing. This can significantly reduce closing time — and a quick close is appealing to sellers.
8. Offer full price on post-Open House listings.
9. Respond immediately to counter offers. A majority of the investment properties for sale on Roofstock receive multiple offers. Because the seller may be negotiating with more than one buyer simultaneously, it's better to respond to counter offers as quickly as possible. Getting your response in sooner than other potential buyers may help edge out the competition.
10. Bidding on an Open House investment property? Here's one last tip: If you are bidding during a 72-Hour Open House period, expect an especially competitive environment. During that time, the investment property is open to offers above the list price. At the end of the Open House period, the seller has 24 hours to review all offers and negotiate with one or more potential buyers. More than half of these homes typically sell above list price. Prepare your bid based on these facts to improve your chances of winning.
Your first (or second, or third) offer might not come out on top, but the right investment property for you is out there — it simply boils down to being prepared, informed, and ready to make a move. The good news? If you've reached the end of this article, you're already a step ahead of the rest.