First-Time Homebuyers Frustrated by Investors

The lower prices and desperate homeowners have lured buyers off the fence. Many of the buyers, though, are investors.

One way for them to make cash quickly is to file a notice of option to purchase the property at a low price at the county courthouse. This gives the investor time to market the home for sale while they negotiate the short sale with a lender. Once a buyer willing to pay more is found, the investor buys the home and sells it, usually on the same day.

The problem occurs when so many of the investor's potential buyers are seeking loans that forbid flips. More and more lenders say they won't approve such deals.