Shopping To Get A Deal
There are some signs that you may get a deal on a home: there are clues from the seller and there are things you can do as a buyer to make yourself be more appealing as a buyer: for certain characteristics a seller may be more willing to deal.
So what do you look for, how do you know a seller my be more willing to deal?
- A vacant property. This means, in many cases, the sale is a formality something that must be done to move on.
- A divorce situation.
- Previous offers that fell through. The seller may be getting tired of buyers failing to go through with the purchase and if you are a strong buyer, you're more likely to be in a better negotiating position.
- The seller is shopping for another home. They're in the middle of a life change and may need to sell one home in-order to proceed with moving.
- The home has been on the market a long time with several price changes.
- The seller has little or no debt on the property.
- A staged home: this is a mixed signal and it depends on the extent of the staging. Good staging is expensive and the quicker a home selles the shorter time the furniture has to be paid for.
- The home has been listed multiple times. This may mean the seller is unrealistic, but it may also mean they are getting more motivated.
- The seller is offering incentives for the buyer to bring an offer.
- The seller is a bank or trustee: for banks holding foreclosed homes, they are a liability and need to be sold, often for lower price. Banks are not emotionally attached so they are more willing to get something done. Trustees of an estate often have to liquidate the assets and, just like banks need to move the real estate.
- The home has lots of competition from other distressed properties like foreclosures or short sales.
- The sale is a short sale. This means the seller is in trouble and often may be behind on payments. In many cases, for the seller, it's better to have a short sale then a foreclosure on the record so they will be less inclined to negate a lower offer as long as it's within the bounds of what a bank will accept.
- The property is over built, over remodeled or unique. In cases like this you may be getting much more for your money because outlier properties, generally, need to be nearer to the neighborhood level of finishes and prices.
- The builder is having a close out. There may be a few homes left and the builder may be willing to sell for less so that she can move on the next project.
There are characteristic you may possess that will help you be a stronger buyer which in many of the cases above will put you in an even more advantageous negotiating position.
- You're a cash buyer.
- You may close quickly.
- You don't have too many contingencies.
- You're not requesting too much of the seller, like concessions.
- You are pre-approved for a loan, not just pre-qualified. A pre-approval means the bank has committed to give you the money as soon as you find the home. Being pre-qualified means you simply had a conversation and no one has yet looked at your papers in-depth.
- You have a larger down-payment. Low down payment loans are inherently riskier and more prone to not being approved compared to conventional loans.
Here are a few clues to keep an eye on, but none are a certainty or a guarantee of a discount, simple you're more likely to get one the more of these characteristics appear.
Phoenix Home Buyer's Guide