On Real Estate & More – February 2017
I have been involved with real estate to some extent my entire life. As a child, my parents spent much of their free time at open houses, always trying to find “the worst house in the best neighborhood.” My parents would then buy that house, remodel it, and then have us move to the next one just when the house was finally nice to live in and feeling like home.
The funny thing is, now as an adult, I find myself doing the same thing; always looking for the next “good deal.” And, I must admit to spending too much of my free time watching HGTV’s home buying and home improvement shows, like Love it or List It, House Hunters, and Property Brothers, to name a few.
But finding the next good deal is not as simple as they show on TV; people don’t really go look at three homes and pick between those three. Finding a good deal is really about diligence. Here are several tips to help find a good deal, whether you’re looking for an investment property, a property for your business or simply a home for you and your family.
Consider buying a bank-owned property or a short sale—Foreclosures and short sales involve potentially more risk than a traditional sale. In a bank foreclosure, the bank is the seller. Because the bank has never lived in the home, they know nothing about the property or its condition. In a foreclosure, the bank sells the home “as-is” and requires the buyer to sign documents releasing the bank of any liability.
When purchasing a short sale, the seller needs their lender(s) to approve the sale as the seller is trying to sell for less than the amount owed on the property. Generally, short sales take more time than a traditional home sale. This can lead to a situation in which a buyer waits for months for the bank to approve the short sale, only to have the bank reject it. Meanwhile, the buyer may have missed out on other properties.
While there are clearly risks in buying a distressed property, distressed sales tend to be priced below current market value. Because the foreclosure process can take several years, these properties are often in need of some repair or updating. So, further discounts may be given to compensate for buyers willing to rehabilitate a property.
Look for newly-listed properties or those that have been on the market a long time—Sometimes, it’s not the highest offer for a property that gets accepted, it’s simply the first. If you need a loan, make sure you are pre-approved from a bank so you are prepared to make an offer, and have your real estate agent set you up with automatic email alerts notifying you of any new property that comes on the market.
Conversely, another way to find a good deal is to look for properties that have been on the market for a long time. Those owners are sometimes willing to sell for a discount, because they are tired of holding on to that property.
Approach owners privately—In a strong real estate market, like the one most of the United States is experiencing today, good deals can be hard to find because of the large number of people looking for a home. In some areas, a single house for sale might get several offers in the first several days. One idea is to have your agent look outside the multiple listing service and contact owners directly, asking them to consider selling.
Look at a lot of properties—Finally, understand finding a good deal usually involves looking at a lot of properties.
So, if you are interested in finding a good deal, talk to a local real estate agent about available properties in your area, and start looking. You might be surprised at the deals you can get.