How To Get A Great Deal in Real Estate
When selling real estate today, buyers frequently ask me, Have you seen a lot of “great deals” in the current marketplace? I can honestly report, those deals are not just the stuff of legends; they really do exist, though not in unlimited numbers. I will point out, in most cases, the sales were usually before, during, or after a foreclosure circumstance. The question that follows my recount is always the same: How can we get one of those deals? My “boy scout” response is always the same: Be prepared.
Unless you’re a cash buyer, with liquid funds at your disposal, the first thing you will need to do, in order to get ready for obtaining a great deal in real estate, is secure your funding. Long before you concern yourself with finding the perfect property, you should know what lender you’re using, and how much they’re willing to lend you. The ease with which a homeowner can qualify for a mortgage is not what it once was. Guidelines are more stringent, and those who once had no problems at all obtaining credit are finding their lending sources have all but dried up. With most bank-owned properties, the seller will not even accept an offer if it does not include a pre-qualification letter guaranteeing funds. Make a note: Your credit score is your best friend these days, so before approaching any lenders, do your best to clear up any blemishes on your records.
You should also be aware that most foreclosed properties are sold As-Is. You can ask for an inspection or due diligence in your offer, but be forewarned that the banks have not been very forthcoming with those types of concessions for buyers. This does not mean the property has something wrong with it. It simply means the property is already priced at a significant discount, and the bank is not willing to put any further funds towards repairs, even if you find something wrong. Of course, when writing your offer, my motto is: It doesn’t hurt to try.
The next level of preparation, too often undervalued by buyers, is establishing a relationship with a good real estate agent. You should know your agent, and they should know you well enough to have a pretty good idea what type of property you are hoping to acquire. A good agent will stay abreast of developments in the market place on a daily basis, and be aware of deals as they appear on the horizon, or even before. Don’t be afraid to ask your agent questions, and if you cannot get a prompt response from them, move on, as timing plays an important part in today’s real estate transactions.
Now comes the time for the most important thing you will need to remember in order to obtain a great deal in today’s real estate marketplace: opportunity is not a lengthy visitor. If you have everything lined up and are all ready to buy, hesitating, even a day, can mean the difference between getting the opportunity to make an offer on a property, or missing it all together. This is not to suggest you must react rashly when an opportunity comes along; just be decisive. In any market, even this one, homes that are priced at a value will sell, and the speed at which they sell is commensurate with the level of value they offer. Simply put, when the homes are priced to sell, that’s usually what happens, and the better the price, the quicker they sell. I cannot emphasize enough how much time is of the essence in order to procure a “deal” in today’s real estate market.
It isn’t always a matter of another buyer getting there first. In this uncertain market, sellers are getting antsy, often opting for lease/purchase options to avoid the possibility of losing their investments. Just this week, I had two different sellers who got nervous, and signed lease/purchase contracts in order to rent out their properties, rather than risk the possibility of thier not selling. Later, this same week, I received offers from a serious buyer on both, but too late. Timing is everything.
Lastly, know yourself and your limitations. If you are the type of buyer who needs to find “The One” and have everything thoroughly checked out before you buy, then you will probably not be the stuff great deal legends are made of. The tales of people who snag the “super buys” have one common thread: when the opportunity presented itself, they were decisive and acted efficiently.
It all goes back to my pat response: Be prepared. I often recall an old adage, that Luck is just Preparation meeting Opportunity. So, my advice... get all your ducks in a row, and you’ll find it’s a lot easier to be a lucky duck in today’s real estate market.
© Copyright 2008 – Mark G. Hendry – All rights reserved.
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