A Unique Home-Buying Strategy That Works in This Market

Over the last 35 years, I’ve negotiated thousands of real estate deals. In the last few months, we’ve had to start using different strategies to help our homebuyers succeed in this extremely competitive home-buying market. 

One of the most successful has been our use of private financing. We’re using more hard-money loans to get offers accepted. We put down at least 20% to the lender and agree on terms (which can start at a 9.5% interest rate). We were recently working with an investor who was having loan challenges. We were able to use hard money to get the offer accepted and refinanced to a much better rate once the offer was accepted.

Here’s how the costs broke down when using the hard-money loan:

• 30% down payment from the buyer
• 70% down payment from the hard-money lender
• 9.5% interest rate
• $900 doc prep
• Normal closing costs
• $1,800 per month

That 9.5% rate is high, but now we’re in the process of refinancing to a lower rate right after closing. Every single person wins in this situation. The buyer, the seller, the lender, and both agents. Why not try hard money if you’re having trouble as a homebuyer?

If you have any questions about this process or buying a home in general, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.