We always want the best deal; and even better when we can find a great deal on a great house that we really love. If you’re ready to get into the real estate search game, know all you can about the business, the market and prepare yourself for getting a great deal. Here are 5 ways to get the very best real estate deal.
#1. Know the market.
The knowledge really is power and if you’re planning on getting the best deal, this is not something that you decide on a Tuesday afternoon and then put in an offer Wednesday morning. You need to do the research in order to get the best deal. Take some time; maybe even a month or two to really find out where you want to live, get a good list of communities, subdivisions or neighborhoods that you’d like to choose and then the research over the last six months for that area.
How is the market doing? Are homes increasing in value rapidly or gradually? Are homes dropping in value? What about the crime rate for a particular area? Are there good schools in the area, something to consider for resell value? Home selling quickly? If homes in a particular area are selling fast you may need to come up with an escalation clause or deal with multiple bids for the same property.
If there are 300 homes in a subdivision yet only two or three are listed at a particular time, chances are that’s a very popular neighborhood and you might end up paying more than the asking price in order to get the home. If there are dozens of homes in a smaller neighborhood, people may be moving for a particular reason. Is there new construction going to be happening in the area? Talk to the neighbors about why they’re moving. And of course, talk to your buyers agent about a particular neighborhood, why you want to live there and if they have any concerns or advice they can share about the subdivision, community or area in general.
#2. Set yourself up as an attractive buyer.
After you’ve done the research on a particular neighborhood and you have a good idea of the area you want to live in and the price range, set yourself up for homebuying success. This means doing the financial homework necessary in order to purchase a home. If your financing the property, talk to a lender about the type of loan that works best for your situation. Get a preapproval letter and set aside some funds either for a down payment and/or earnest money deposit. The larger the earnest money deposit the more serious sellers take you. They may be more inclined to accept your offer then another similar offer that has a lower earnest money deposit.
Another way you can be an attractive buyer is to minimize your contingencies. If you need to sell a particular property, have tough financing contingencies or too many conditions that need to be completed before you finalize the purchase, sellers just see you as a hassle and may decline your offer altogether. Of course we always recommend a home inspection but in a slower market you might consider a home inspection prior to making an offer. This could waive the inspection after the offer is accepted, speeding up the process and making you more attractive to the seller.
#3. Consider a foreclosure or short sale.
Foreclosures and short sales are still out there and they can be great deals. There are keys to look for though in a foreclosure or short sale property:
- Find the least attractive property in the best neighborhood. By doing so you can instantly gain equity once the home is fixed up, because it matches the rest of the homes in the area.
- Keep your eye out for mispriced listings. Overpriced properties will generally get very little interest and attention and could sit on the market for a long time. These are great properties to go for because they might be more inclined to accept a lower offer.
- Buy a foreclosure at the year or quarter end. This works especially well with cash buyers. If you make an offer at the end of a month, quarter or year, many banks will accept that offer in order to get the deal closed and off the books.
- Look for the diamond in the rough. Many real estate agents make it too many homes from banks and not have enough time to really research the property and showcase the best features. Check out these properties a little bit closer and if they meet your criteria for size and the neighborhood, check out in person and you might find great features that the real estate agent failed to mention.
#4. Negotiate with everyone involved.
You can negotiate pricing from just about every party involved in the real estate transaction. This could include your real estate agent, appraiser, lender, inspector, escrow and title company. You might be surprised at how much you can save simply by negotiating everybody’s fees in an amicable and reasonable way.
#5. Know When to Pull the Trigger.
Knowing when to pull the trigger is something that you and your buyers agent should discuss. Once you’ve done everything prior to this point, knowing when NOT to wait is crucial. By determining all the factors above, understanding the area and the market, you should be able to pull the trigger on an offer at the right time.
ALSO – know when to walk away. This is just as important as knowing when to go for it. Your agent will be able to talk you through the plan and when not to get your emotions too involved. Sometimes, buyers can get so wrapped up in the process, they overpay when it’s all said and done. Don’t let the idea of “winning” become the focus over getting the right house at the right time.
Ready to get started? Ready for step one? Let’s talk!