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I have a question about the way some homes are marketed in the advertisements when listed for sale. I see ads, particularly for smaller, more modest houses that are targeting investors who will rent the homes out, rather than first time home buyers. In some cases, these homes are being sold by an owner occupant but are being marketed as investment property. And then I see ads for similar looking homes being advertised as "great for first time home buyer".
Are there any ethical issues for targeting a home buyer in one neighborhood and an investor in another when the homes are similar? I can understanding why a home would be advertised to an investor if it's already a rental. If it's not, though, is advertising a property as an investment property sending the message that a neighborhood is on the decline and that it's not somewhere someone would want to live as their home but just some place to rent out?
Is there any ethical consideration for encouraging one neighborhood to be bought up by absentee investors but steering owner occupants to another? The "perfect for an investor" ads seem to be for homes in somewhat more marginal or troubled areas, and it seems like this marketing tactic is just encouraging more absentee landlords who are just going to make a quick dollar at the expense of an area's stability and property values. Of course, I know this can happen regardless of how a property is marketed, but is it really appropriate to explicitly encourage this in some areas but not others? Maybe I'm being a bit cynical but it seems subtly analogous to the redlining that used to occur with lending practices.
I mean this in a respectful way, and appreciate any input, especially from those in the real estate profession. I'm in NC (as my profile shows) and I see this a lot here, and have always been curious about this issue.
It could be that the property for sale has a major defect that would make it impossible to get approved for a mortgage, or the property needs so many repairs and the seller does not want to or have the money to fix it.
Investors are more likely to pay cash and make a quick sale for distressed properties. Then they fix it up and either resell or use it for income property.
This isn't unethical and it certainly isn't redlining.
As a listing agent I would try and get the most money for my client's property as possible. Investors are not looking to pay top dollar so I wouldn't market to them unless the above were true.
Usually "Investor Property" means a piece of crap that someone needs to unload quickly and cheaply for cash.
That's what I always thought.
"Turnkey" means needs some work.
"Handyman's special" means a total rehab is needed.
"Investor" means you should probably push it over and rebuild.
"Teardown" means there's a corpse buried below the basement.
I don't view it as unethical. It's just like advertisers putting on toy commercials during a children's TV show. They're marketing toward kids because they're likely the ones who will want the product.
Same goes for realtors who market certain houses toward investors- they do so because they're the more likely target market.
DH and I saw some houses marketed toward investors when we were house hunting. We aren't afraid of a little work or cosmetic DIY but boy oh boy, these houses were often a mess! Missing copper pipes, missing HVAC unit, really funky things going on with the electric.
As others mentioned, it's unlikely that some of these houses would qualify for loan requirements in their present condition. Also, they were often being sold as is, so there was little to no chance of the seller agreeing to repairs.
They needed a cash buyer with more cash on hand to inject into the property to make it livable to either resell as a flip or rent out.
"Turnkey" means needs some work.
"Handyman's special" means a total rehab is needed.
"Investor" means you should probably push it over and rebuild.
"Teardown" means there's a corpse buried below the basement.
"Teardown" means there's a corpse buried below the basement.
Typically teardowns around here are either places that have recently caught fire or a house that has been abandon for 20 years with the roof leaking the whole time. Completely rotted.
Yes and it also means don't do an Inspection and come to me with a long list of things to fix.
Everything is negotiable. Even if you have to go back and forth with the price, at least you have an interested party. Lets say you go back and forth and come to a $500 concession on the price, go for it. To place a line in the sand and say "this is the price, take it or leave it" may mean you could be sitting on it for years.
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