How Do I Find the Bargain Priced Homes?
Every buyer wants to find the best buy out there; but where do you start looking for homes that bargain priced?
First start working with a Buyer’s Agent. Buyer’s Agents usually are the first to know when there’s a bargain home out there.
They also can pull up listings that will have homes that are considered “Fixer-Uppers” which are generally sold for well less than their value if they should be free of any updates and fixes needed. Buyer’s Agents have a direct line to the real estate industry and open lines of communication with other agents who may have homes that they know must sell and can sell at a real bargain price. The only problem with all of this is that this is how almost everyone operates when it comes to finding the bargain homes. There is another way.
Ask your agent if they can access the inside investor market. Most Realtors don’t even know this market exists. The inside investor market is where the homes hit that are 40-50% off their actual value and hit this market before they’re even listed on the MLS market. If they make it that far, which is rare, then they’re usually not as hugely discounted as they could have been or they’re not as wonderful of a deal as you really want; otherwise they would have been scooped off the inside investor market. You may find that you can’t find an agent that is involved in the inside investor market in your area; should this be the case then you may have to go with a typical Buyer’s Agent who utilizes MLS listings to find their “bargain homes” but that’s not exactly a horrible thing. You have to work with what you have.
Short Sales are going to offer a home for less than what the owner owes on the home. This may or may not put the home in a highly discounted position because it’s based upon what’s owed on the home by the current home owner. With the market changing as much as it has lately many people own much more than their home will ever be worth so make sure your Buyer’s Agent pulls the CMA which gives you a marketing analysis on other homes in the area so you can compare the cost of the Short Sale home to the values of other homes in the area.
Foreclosures are generally offered at discounts but once again it’s not always the case. You need to be sure to utilize the skills of the Buyer’s Agent so you know what the houses in the area are going for and if this foreclosure is really worth it. Sometimes houses that are foreclosed on will go up for Sheriff Sale and be auctioned instead of listed. In these cases you need to be sure that the home hasn’t been vandalized and abused while it’s sat empty.
Auctions can happen to homes for various reasons. One of the most frequent reasons for a home going up for auction is unpaid taxes. These often end up being auctioned without the ability to go into the home and doing nothing more than a drive-by; basically sight unseen.
Another reason for a home to be put up for auction is to settle an estate quickly as opposed to waiting for the house to be put on the market. In either case you do have a chance to grab a house at a bargain price. The problem with auctions is that you don’t know who you’re going to go up against and you have to know the CMA for the area the auction is in so you know how high to bid. Another thing to keep in mind with auctions is that you will be bidding up against people from every walk of life; contractors, professional house flippers, first time home buyers looking for an cheap way to buy a house, and more.
Bank Owned sales often result in the bank taking almost any realistic offer on the home because simply put, they don’t want to own a home, they want the money. Again, your Buyer’s Agent can help you negotiate a good deal here.
Fixer-Uppers are a great way to purchase a home for a fraction of their value but you have to take into account what the value of the home in that area is worth and know how much it’s going to take to flip the house so you can resell it as quickly as possible. Obviously if you’re not the handy-man type this is probably not the kind of home you want to buy because when you add in the cost of labor to the costs of fixing up a house, that’s when the money starts going out. Be prepared to make a list of items that need to be done before the house is in the condition it needs to be in either to sell it for a profit or move in to. This is where it’s going to pay to have a crew whom you can trust to give you quick and accurate estimates on the work that needs to be done. Start with the obvious and architectural problems that if they aren’t addressed will have the capability to cause more harm to the house. For example a leaking roof should take priority over indoor plumbing which can be shut off until it’s time to work on it.
When you’re buying bargain homes there is a bigger sense of urgency to move on the home before someone else finds it. You are going to have to have complete trust in your Buyer’s Agent and listen to them as to whether or not this house is worthy of jumping on; otherwise someone else with the knowledge to know the difference between a bargain and a bad house that’s just priced right for its condition is going to beat you to the punch. So there is a definite urgency needed when you’re out looking for that super bargain deal when buying a home.