The Essential Guide On How To Buy Like A Pro
Leverage the Power of the Internet
By using a combination of MLS searches, 3rd party property search sites, classified ad sites like Craigslist, and investing in Google and Facebook ads, we can help you hunt for real estate bargains from day one.
These property searches will also help you get your finances in order, and get a better idea of the size of the mortgage you’ll need to live in the neighborhood or area of your choice.
We can also run email marketing campaigns aimed directly at our network of contacts in order to help you find properties not publicly listed. These could reveal amazing deals impossible to find otherwise.
Find The Right Lender and Mortgage For You
Just like you would always get a second opinion from a doctor, you should always get a second (or third, or fourth) offer for a mortgage loan.
Though interest rates from top lenders (major banks being some of the most popular ones) tend to be pretty similar, even a tenth of a percent in a fixed-rate loan makes a huge difference in the long run.
At the same time, the right lender will help you see if you qualify for a number of government-sponsored programs geared for first-time buyers.
As always, our team of real estate professionals can help you find the right lender and loan.
Making an Offer in Today's Market
The phrase “You snooze, you lose” is especially relevant for real estate buyers, and macro market conditions also temper what buyers and sellers can expect.
In today's market, buyer participation has been strained under the thumb of the Fed interest rate increases. Inflation remains a major factor, but the reduced number of interest-sensitive "payment" buyers is the main driver of today's falling home prices.
If the seller is in a rush to sell, a buyer has a greater opportunity to strike a deal. Many sellers who sense a disequilibrium between real inflation and the value of their homes have removed their listings from the market and are willing to wait out selling until they can get a better price.
So, the market has many moving pieces, and buyers must gauge the risk that waiting, could mean higher prices versus buying now and refinancing later.
Still, to be ready to take advantage of any potentially great buyer, a buyer must have their loan approval waiting. Nothing turns off a seller more than an offer that is not accompanied by a lender or proof of funds letter. To make sure that happens, you MUST get your finances in order.
And once you’re pre-approved, don’t delay when you find a deal. With homes still in relatively short supply, a good deal can get snapped up fast.
When you work with our team to establish the parameters for a good deal, we can supply the numbers, not just provide colorful talk. And as soon as a deal that meets your requirements hits the market, you'll be ready to make an offer in the same day.
Also, as you wait for a great deal to hit the market, we can keep an eye out for properties that have been stuck on the market for a long time. The owners of these homes could be more willing to sell at a discount, because they’ve been stuck paying a mortgage for the entire time it’s been listed.
Ask the Seller to pay closing costs
In the super seller's market of the past few years, the buyer typically offered to pay the seller's closing costs. That situation has changed to a more balanced and negotiable aspect of making an offer. Today, closing costs, like pretty much everything in real estate, is negotiable.
Of course, sellers don’t like to sell homes for less than their bottom line. Not just because they don’t want to lose more of their equity, but also because they have to become buyers again and hence are gauging their future costs.
Home sellers are keenly aware of how much their neighbor's homes sold for so their expectations do have value references or COMPS.
If the sellers are adamant against bringing down their asking price, we can still negotiate for the seller to cover the closing costs.
Not only does this allow the seller to save face and keep a larger final price, but it could also save you thousands of dollars.
Shop during the slow season
Even if you don’t live in a place with a harsh winter, most home buying and selling activities take place during late spring and summer.
As a result of that seasonal increase of activity, home prices go up.
So if you’re willing to brave the cold and wait until winter, you may be able to capitalize on some amazing deals. People who are willing to list their homes in the middle of the holidays are typically very motivated to sell. This, of course, could lead to amazing deals for you.
On the other hand, there’s a downside to shopping for homes during winter: you’ll have fewer homes to choose from. And when making offers, you’ll have fewer recently sold comparable properties to help you calibrate your offers.
Look into bank-foreclosed properties
Banks are not in the business of homeownership. They are in the lending business. Homeownership comes with a lot of maintenance requirements, expenses, and taxes.
Which is why any time a bank ends up taking possession of a home by means of a foreclosure, the bank would want to sell it as quickly as possible. This usually translates into banks selling homes at a substantial discount.
On the other hand, not every foreclosed property is an amazing deal.
The foreclosure process is a lengthy one which could drag on for years. Many foreclosed homes are in serious disrepair. If you’re not careful, your bank-foreclosed property “deal” could turn into a nightmare scenario.
It’s extremely important to work with a professional real estate team that has plenty of knowledge and experience dealing with foreclosed properties.
But if you’re willing to spend the time and resources needed to sift through the foreclosed home inventory, you’re sure to find some valuable gems.
Drive for dollars
A tactic commonly used by real estate investors is driving around neighborhoods they’re interested in to find good deals. Of course, this takes scads of time and gallons of fuel, and there are no guarantees.
Yes... It really is that simple.
These investors would get in a car, drive around the area they are interested in, and look for homes that give signs of a potentially motivated seller. This includes homes with a “for sale by owner” sign, homes in disrepair or showing signs of neglect.
Next, these investors would knock on the door, and introduce themselves to the owners. They let the homeowners know they’re interested in buying a home in the area, and would ask the homeowners if they could point you to someone looking to sell, or if they themselves are interested in selling their home.
If no one answers the door, even after several attempts, not all is lost. These investors could do a property search in the city’s public records or a reverse phone number search to find the owner’s contact information.
Look into new and pre-construction developments
If you’re not willing to look into fixer-uppers, another possibility is new and preconstruction developments.
Developers looking to finance the next development phase are often willing to offer homes with greater incentives and discounts for the first handful of written contracts.
Of course, the catch is that you need access to pre-construction communities, but that is where Realty Anna can be a big help and information resource.
There is usually negotiation room on pre-construction, from everything in terms of price and deposit structure to upgrades and closing costs, and it is easier to make a CONTINGENT offer. Having an experienced Realtor® who is experienced in the industry and able to help with your negotiations can add to your savings.
If you’re interested in finding pre-construction unit deals, we can help you find the best pre-construction deals in the area.
Look into tax-delinquent homes
As you know, every homeowner in the US must pay his/her yearly property taxes. But if they fail to pay these taxes, their name is added to the county’s treasurer’s “Tax Delinquent List.”
If enough time goes by (1-5 years, depending on the state) and the homeowner doesn’t pay those delinquent taxes, the county takes possession of the home via a tax foreclosure. Then, the house is auctioned off to recuperate those missing taxes (from which the homeowners would get $0 in return). Most sales are cash sales only.
Believe it or not, tax delinquent lists are part of the public record. You can have access to your local list by asking for it in your county treasurer’s office, and paying a fee to obtain it.
This list is filled with homeowners that have a HUGE motivation to sell their property, especially if they haven’t paid their property taxes in years. If they’re only a year or two away from losing their home to a tax foreclosure, they could be willing to sell their home at a significant discount.
Of course, as you may expect, many of these homes fall squarely into fixer-upper territory and would require you to have plenty of capital to get them into shape.
Get in touch with real estate wholesalers
Real estate wholesalers make a living in finding amazing deals, marking them up a bit, and reselling them to real estate investors.
Some of the homes they resell could still be fantastic deals. Meaning that with the right wholesaler, you could still find amazing deals, but buyers need to be aware of risks depending on how the property was appropriated by the investor. Buyers of such properties really need an agent, or even a lawyer to help ensure such homes are conveyed properly so ownership is not questioned afterwards.
Real Estate wholesalers can be found in local real estate clubs, google searches, and industry networking events. Once you get in touch with a real estate wholesaler or two, make sure you give them your contact information and tell them to add you to their buyers’ list.
Again, just like with tax-delinquent homes, many of these properties fall into fixer-upper territory. Make sure you keep that in mind.
Hire an Amazing Real Estate Agent!
As a home buyer, you have absolutely NO reason why you shouldn’t hire the best possible real estate agent in your hyperlocal area.
We bring a wealth of expertise, street smarts and knowledge to find you the right home at the right price. We can use those skills to help negotiate a far better price than you could get on your own.
Our services offer a buffer of protection. Thanks to our experience and expertise, we can see toxic deals a mile away and can warn you against them. We can also help you avoid common legal pitfalls in real estate which you could stumble into on your own.
In Conclusion
With any substantial purchase, buyers must beware of potential risks that may not be self-evident. If it is too good to be true, usually there are reasons.
Though it may take effort and patience, if you work with a knowledgeable and experienced real estate agent and know where to look, you’ll also be able to find some of the best possible deals in the area while having an agent who can help you avoid costly mistakes that can take years to undo.