Zillow Says Home Buyers Will Compete With Flippers in 2024. Here's How to Find a Good Deal

As if potential home buyers didn't have enough to worry about with sky-high home prices and elevated mortgage interest rates, Zillow says they may have another factor to consider in 2024: Competition with house flippers.

Zillow's 2024 housing market predictions report says buyers may be more willing to purchase a home that needs a little sprucing up than in the past, thanks to housing inventory being below pre-pandemic levels.

And that means traditional buyers may be putting in offers on houses that flippers also have their eyes on.

Why buyers will have to compete with flippers

Zillow's economists think there will be more houses on the market in 2024 than in the previous year, but there still won't be enough to go around for everyone. Low inventory and high housing prices will make fixer-uppers look more attractive to potential home buyers.

I know this has been true for myself. I've looked at many homes over the past year and have been more drawn to cheaper homes (with lower mortgage payments) that may need significant updating.

How all this competition will shake out in the market is still unknown. It's unlikely that the competition will spur the same kind of bidding wars that were common over the past couple of years, considering that house prices have already jumped 27.7% since late 2020.

Zillow also notes that while traditional home buyers and flippers may have their hearts set on the same house, flippers may be reluctant to pay higher prices for some homes because they won't earn enough profit from the flip.

How to find a good house that needs a little work

There are many factors to consider when buying a house that needs work. For example, Redfin says that many mortgage lenders won't approve a conventional loan if the home isn't livable. The good news is that there are plenty of renovation loan options available.

If you're in the market for a house that simply needs some updating, here are a few things to consider:

• Get an inspection: No matter what type of house you're trying to buy, you should always get an inspection. Waiving an inspection means you're willing to buy the home, no matter its problems. That's typically more responsibility than most homeowners want to take on.
• Estimate renovation costs: If you don't have experience renovating a home, you may want to bring a contractor along with you for this part. Go room by room and list what each area of the house will need. Spend some time researching the time and cost of each project.
• Include contingencies in your offer: Rocket Mortgage® says including some contingencies in your offer, like an appraisal contingency, is a good idea. An appraisal contingency may allow you to back out of the deal if an inspection shows the house has a significant problem and, thus, isn't worth the amount you offered.

It may also be worth spending a little time finding the right real estate agent if you want to flip a house. Before I decided to sit out the housing market, I had an agent who not only bought and sold homes but also flipped them. Being able to bounce questions off him about what work may need to be done and how much it would cost was invaluable as I considered homes for sale.