Price Watcher Plus! A Dose of Caution and an Ounce of Advice
The current real estate market is highly competitive. But don’t just think it’s competitive for sellers. It is of course, but it’s also competitive for buyers. Why do I say that? I say that because you have to be extremely well informed to find the right properties at the right prices. It’s not enough to see a property that is listed well below its last purchase price. That’s not the big picture. You have to look deeper.
You need to know your stuff. Yes, past sales data is extremely useful. It gives you a sense of the state of the seller and how values have depreciated, but only within the timeframe of the recent past. Many homes that are priced lower now were purchased during the real estate boom and market conditions have changed a lot since.
To be fully informed, you need to look at a lot of listings and all the data that go with them. The key clues an informed buyer should examine are square footage pricing, similar listings, past sales, current valuations and projected declines. These tidbits, taken as a whole, will give you a pretty good picture of what’s going on with a particular property. Then, if you’re intrigued you can take the next step and do a drive by. If you’re still interested at that point, schedule a tour and take it from there.
If you’re looking at a property that you think might be in trouble, be careful. There are plenty of them out there but they are not easy targets. When banks and lenders are acting as sellers, the transactions can become cumbersome and slow. Some really low priced homes might be priced to generate a lot of activity and actually lead to bidding wars, rejected offers and price increases. That can be a very frustrating game to play. Probate and estate sales involving a trustee can be similarly tedious and time consuming. They are also often as-is sales where you will have no negotiating power to adjust price for needed improvements and come with no seller insurance or disclosures.
There is also a segment of sellers who have not come to terms with their financial predicament and are holding strong on asking price believing they can minimize their losses. Throwing a low ball offer at these folks will only infuriate and alienate them, making a successful bid on your part unlikely. So, when you’re ready to buy, make sure you are armed with knowledge, patience and a healthy dose of good old fashioned tongue biting. The trio will carry you a long way in making a good solid investment decision.
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