In these unique economic times there are many so-called "bargains" out there, such as homes in short-sale, homes in foreclosure, homes for sale by owner, homes "under tax value", homes for "swap", homes for lease-purchase and so on. You get the picture. Everyone wants a "deal" and make no mistake "deals" are out there, but you have to adhere to the adage that you truly "get what you pay for". Meaning that just because a home that you are considering making an offer on has one of these glamorous tag lines that assures you that you are getting a deal that no one else can--doesn't mean it's so. Keep in mind these points when making an offer so that no matter what market you are in, your investment in real estate is as sound as it can possibly be.
*Buy a home that fits YOUR needs--don't buy a 2 bedroom home with one bath and no garage because you feel like its a bargain if your family needs more space and you have a classic car collection--buy a home that makes you happy in the short and long term.
*Don't assume that all foreclosures are bargains--You never know the condition of the home, how the previous owner cared for and maintained (or didn't) the home. Also, there may be other homes in the same neighborhood or area that are in better condition, that offer the same or more amenities AND at a similar or lower price. Why pay for something that needs a ton of work, has no history that you know of and may have other negative attributes, when you could pay a couple thousands of dollars more for the same or better home, less work and peace of mind? Make sure you've seen all of the homes on the market in an area and have compared the pros and cons...sometimes distressed sellers can offer better bargains than the banks!
*Be aware of short sales--Until the banks have additional staffing in place to handle the volume of short sales that they are experiencing, you as a buyer could wait for MONTHS to even receive a reply. In that time other buyers are also submitting offers that are directly competitive with yours. If you are considering purchasing a home that is part of a short sale situation, make sure that both your agent and the listing agent have had experience in this arena and make sure that they have good working relationship and line of communication with the bank involved in the sale.
*Just because it's under tax value doesn't make it a great investment--Tax value is assigned by the local government, in our area, the county tax assessor. These folks don't enter your home or your neighbors' and usually use a multiplier based on previous years' values and overall appreciation over the past five or so years. They don't know that you changed the green shag carpet or updated your kitchen...they make an educated guess based on numerous factors and equations. Tax values are all over the place as compared to market values and have little bearing as to what a buyer and seller agree is a good price on a given day. Tax values are a "catch-22" --meaning, you want a low value as an owner because you don't want to pay a lot of taxes, but when you sell, you want the value higher because unfortunately buyers look at this number as some sort of "rule of thumb" as to what kind of "deal" they are getting...so my advice is let's use this number for what it's intended for and that's to pay Uncle Sam--not to establish value!
*It must be a great deal if it's a FSBO! Not so! Just because the unrepresented seller isn't paying an agent, that doesn't give it the stamp of approval as a certified DEAL! Keep in mind that the sellers establish the price they are asking for the home with little to no experience in setting prices--of course they think their home is best--it's theirs, which usually means an inflated price! This understandable passion for their own home can translate into awkwardness and difficulty when negotiating and not using a licensed agent as a third party perspective. I cannot even begin to tell you how many listing appointments I have been on where the folks trying to sell their home have discovered that they grossly overpaid when they purchased years ago because they thought the seller was "cutting them a deal." Though it's getting easier to get comps off of the Internet to see what other homes in the area have sold for, it's not so easy to find out if the area has a stigma due to new road construction, railroads, air traffic or industrial nuisances. Usually it's not the owner who is eager to share these tidbits with you or know that they are legally obligated to do so.
So in a nutshell, be vigilant in these times of opportunity, keep your head on straight and don't be swayed by lots of catchy marketing verbiage. Employ a buyer's agent to keep you on the right path, to represent your interests and to advocate for you...it's well worth it and it doesn't cost you a dime out of your pocket!
If you need more information on any of the topics discussed here or to talk about how I can represent you, please contact me via phone 336.817.3598 or visit my website http://www.brookecashion.com/. I would be happy to discuss your specific situation and provide references should you request!
Happy house hunting!
Brooke
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