Tips on finding a good deal---that REALLY work!!!

In a buyer's market, finding a good deal is what every buyer entering the market demands. With a glut of foreclosures entering the market monthly (roughly 11,000 homes monthly), lingering short sales, and stale re-sales, it actually makes it more difficult to find one because you have so many choices. If you are unable to filter through properties you can end up wasting precious time on homes that aren't worth your energy and missing out on real deals. So after reading my last blog on how to spot a good deal, now you just have to know how to FIND one.

NARROW YOUR SEARCH

You need to have a target in mind as broad as a zip code and as specific as a subdivision. This will enable you to keep a sharp eye on new listings as they enter the market. If your search is too broad, you will likely miss out on deals because you're busy looking in other areas. People wonder how a house can be on the market only a few days and already be under contract; that usually happens when buyers have been scouting an area and notice a sign go in the yard and they inquire (and even make offers) immediately. Some agents will post a sign prior to a home being listed on the MLS.

LOOK OFF THE BEATEN PATH

The very popular communities usually have the lowest possibility of finding a 'steal' because EVERYONE is looking there. These sellers know this so they will either have higher entry level prices or under price a home to create a bidding war (yes, even in a buyers market multiple offer situations are all too common). Some surrounding areas with less traffic will usually yield better prices, less competition, and still have the same location benefits/perks.

FIND A GOOD AGENT

Locating a good agent can be the difference in locating and successfully purchasing a phenomenal deal. Some agents specialize in certain neighborhoods, areas, & even school districts so not only do they know all of the current inventory, but they also may have insight to homes entering the market. Even if the agent doesn't specialize in a certain area, with the right amount of internet savvy (imperative for today's market) they can set up custom searches that locate these hot properties the second they enter the market.

Using these tips will definitely land you a good deal in any market. But remember this, with values so depressed now, whatever you purchase is still a good deal in the long term as values will eventually stabilize and increase. Maybe not to the 2007 values, but at least 30% than where we currently stand in this current market.

Winter home searching----best time to purchase?

Every year home buyers who begin their home search at the end of summer set goals to purchase before Thanksgiving or before Christmas. The goal of being settled in for the holidays becomes overwhelming with handling a house hunt, vacations, & holiday planning all bundled together. To top it off lenders are usually working with skeleton crews during the holidays so loans tend to take a bit longer to process. Even with all this in mind, Winter is the by far the best time to purchase a property, especially foreclosure property, for a number of reasons.

REASON ONE---LESS COMPETITION
Spring brings out all of the 'lookie-lou's' and the income tax refund buyers. Summertime brings out the relocating and families looking to find a new home before school starts. Fall is usually the left over crowd from summer and a few stragglers. With less buyers in the market you have less multiple offer situations and less showing activity on listings so sellers tend to get more motivated. Sellers who keep their homes on the market will see that buyers that are out in the winter are SERIOUS. They brave the elements in search of a new home and are more motivated to get things done by year end.

REASON TWO--YEAR END CLEARANCE
When it comes to short sales and foreclosures, the banks, asset managers, investors, and lenders have incentives to close out the books and every sale counts. Many lenders need to hit sales goals and will push some loans through, however, larger lenders seem to be the most affected by the holidays with shorter hours and vacations. Banks are looking to get stale assets off of their books and not carry these properties over into the new year. They can sense the slowing of the activity in the winter and don't want to hedge their bets on the next season's traffic increase.

REASON THREE--MOTIVATED SELLERS
As I mentioned earlier, sellers who still have homes on the market in the winter are not just testing the waters. They need to SELL! They too feel the pressure to close before year's end and will become more motivated as the activity decreases. All of the resales that were testing the market have taken their homes off the market for the holidays and will "see what happens in the Spring."

REASON FOUR--INDUSTRY SLOW DOWN UNCOVERS DEALS
As the housing market slows every winter, so do the home inspectors, interior designers, movers, & contractors. You can likely get discounts on these services due to the lack of work and get it done in a timely fashion!!!

REASON FIVE--INTEREST RATES
In four of the last years, interest rates have been lower in December than they were in the spring/summer months. Even with market crash of 07 and the bounce back of 2009 it has still been advantageous to purchase later in the year.

Myths about buying foreclosures

Now more than ever it is hard to look for a home in any area or price point and not come across a foreclosure. These REO (real estate owned) properties are everywhere and ready to be purchased. Just like any other type of home for sale, some of them are over priced, some of them are deals, and others are steals! However, as more owner-occupants purchase these homes some of the myths surrounding them are beginning to wane. Here are the myths I hear the most frequently:

Banks don't pay closing costs
Only when you are paying cash will you run into a bank that may be unwilling to pay any of your closing costs. But if you're paying cash $500-$1,700 is chump change right! Banks will pay up to 3% towards a buyers closing costs and some Fannie Mae properties will contribute up to 6% on FHA loans.

Banks don't do repairs
Foreclosures are sold "AS-IS." Banks usually will not do any repairs that are the result of a home inspection. However, banks may consider repairs that are required by your lender such as FHA repairs. Banks will do these because they know that any buyer that is interested will need these repairs done because their lender will require them. You may even be able to get a bank to do a termite treatment if active termite infestation is discovered by the inspector or appraiser.

Banks won't pay for home warranties
Untrue! Banks will usually pay up to $500 for a home warranty. Just because it says no warranties doesn't mean you can't get an after-market warranty.
Properties are sold with no EXISTING warranties on what is currently in the property.

All foreclosures are run-down and need repairs
All foreclosures are not alike! You do have more that need cosmetic work at the minimum, however, it is not uncommon to find an REO property that was well maintained. Some lenders now spruce up the property before listing it, installing new carpet, flooring, paint, and light fixtures to command a higher asking price.

Investors get the best deals
Cash buyers will always get the best deals because the though of closing in 4-7 days versus 30-45 days is appealing to any seller--bank or human. However, some foreclosures (like HUD homes) require a 2-week period where owner-occupants are given the opportunity to vie for the property. If no acceptable bids are submitted the seller will then review the investor offers. This is why it's important to run the numbers and know the value and not low-ball with unrealistic offers.