Buying a home in a seller’s market can be a challenge. But don’t let the rising home values and buyer competition steer you away. If you’re in a market that’s placing favor on sellers, there are still some ways you can score a pretty sweet deal on residential real estate–whether you’re buying a residence for yourself, an investment property, or a vacation home.
Working With the Right Agent
The last thing you want to do when searching for a great real estate deal is to limit your options. However, you do want to be a bit picky when it comes to hiring a real estate agent. A good, hungry real estate agent is worth their weight in gold. Partner up with a real estate professional who loves what they do, and wants to help you find a great deal. Don’t settle for the agent who’s tough to get in touch with, who shies away from unique listings, or who only works in specific neighborhoods.
Don’t Dismiss Distressed Homes
Distressed properties are typically homes that are facing foreclosure, are in a short sale agreement with the current lender, or are offered at a steep discount due to needing extensive repairs or updates. If you’re not afraid of putting in a bit of sweat equity, these properties can be diamonds in the rough–especially in a market where buyers’ options are slim. And by the way, you may be able to qualify for a mortgage that helps you finance the cost of repairs and renovations, so don’t automatically disregard a distressed home just because you don’t have the upfront cash to fix it up.
Make an Unsolicited Offer
Believe it or not, some home buyers and investors have been able to get a great deal on a home they love that wasn’t even for sale. If you happen to see a property that you’re genuinely interested in, write down the address, find out who owns the property and send them a personalized letter. You might be surprised to find out that the owners are open to the idea of selling. And, you might even be able to get a good deal on the price.
That being said, however, don’t go into the situation with a lowball strategy right off the bat.
Be sure to make your offer an attractive one–no one wants to get a lowball offer on a home they’re not even selling. Be sure to do your research on the home, too. If you discover that the home is probably worth around $250,000, don’t make them an offer of $99,000. Lowballing can be insulting to the owners and is usually a waste of your precious time.
Buy a Tax Lien
Didn’t know it was possible to actually buy a tax lien? Most people don’t! But savvy real estate investors often find spectacular deals by doing just that. Here’s how it works: a homeowner doesn’t pay their taxes and a lien is put against their home. If you purchase the tax lien, it essentially gives you the right to buy the property. It may not be the friendliest or most fun way to buy property, but it can be worth looking into if you’re hoping to find a bargain. Investopedia has a helpful article that explains how the process works in more detail.
Keep in mind that some of the methods mentioned above are not first-time-buyer-friendly. You may need a bit of industry insight or investing experience to be able to find success with some of these strategies. If you’re not 100% comfortable with investing in tax liens or writing unsolicited offer letters, you can always stick to the more conservative methods of searching for a good real estate deal. These include networking within real estate circles in your desired area to get to know what the market is looking like and what properties may be hitting the market soon, getting preapproved for financing so you’re a more appealing buyer (this helps you stand out amongst the competition), and setting alerts on all the major real estate listing sites so you are among the first to know when a new listing becomes active.
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