It's natural to want to save money when you're making a
purchase as large as a home. You want to buy the best hom
While you're bargain-hunting, here are five things you
should keep in mind:
Low-balling sellers doesn't work.
They don't waste time with low-ball offers that they find
insulting. Just as you want the home you buy to appreciate in value, sellers
purchased their homes as investments, too. They want to net as much as
possible, because they took a financial risk and had the foresight to buy the
home they chose.
This sense of entitlement -- that homes should only be sold
at a profit - may cause them to overprice their homes or be less willing to
negotiate. You'll feel the same way when it comes time for you to sell your
home, so make your offer reasonably and respectfully. Show the comparables that
led you to make the offer. Be open to compromise.
Other buyers are getting professional help.
Ninety percent of buyers use a real estate agent while
you're spinning your wheels driving around neighborhoods and calling FSBO
sellers who aren't home to take your call. Soon, you'll notice that the homes
you're watching are going under contract with other buyers.
True bargains are rare.
Sometimes a distressed home will impact the prices of the
other homes because they typically sell at a discount of 17 percent, according
to the National Association of Realtors. The other sellers may discount their
homes somewhat, but if they're not in distress, don't expect them to negotiate
as if they are. A bank foreclosure or bank-approved short sale could take
months to close.
If a home has been on the market for a long time without a
price reduction, there's usually a good reason. You have an unmotivated,
unrealistic, or upside-down seller, any of which could waste your time without
resulting in a purchase. Move on to a deal that you can actually make.
The home needs work.
Sometimes a home will be marketed "as is," which
suggests that it needs a lot of work. Or, a home may be well maintained, but
it's so out of date it looks like a vintage sit-com set. You could be looking
at a money pit.
Are you willing to perform the work or pay someone else to
do the work? Before you buy, get a home inspection and then get bids from
contractors who can help you bring the home up to today's standards. If the
purchase price and repairs come to approximately the same price as an updated
home in the same area, then go for it.
It's not a bargain if it doesn't suit your needs.
A home is a good buy only if it suits your family's needs
for space, features, comfort, and function. If you buy a home without enough
bedrooms or baths, you'll pay more in transaction costs to sell the home and
buy another that's more suitable. Choose wisely in the first place because it
takes time to build equity. Your home should meet your needs for a long time.
