5 Ways To Get A Great Deal On A Home In Tallahassee
Everybody wants a great deal, but the fact is, most properties trade at "market value."
But that doesn't mean there aren't some great deals to be found. I've listed 5 ways to get a great deal, four of them do NOT work, and one works every time.
A Great Real Estate Deal
Before you can get a great deal on a home in Tallahassee, you first have to define the parameters of what you consider a great deal. This is where we see significant separation between amateurs and those who have purchased real estate many times before.
We've had buyers explain to us many different ideas on what they felt would be a great deal. Here are four:
- Buying For Pennies On The Dollar - A buyer says he heard he can buy a home for "pennies on the dollar." I ask "what is 'the dollar'"? Unless you know somebody who owns a property (or who controls a property for a bank or asset management company) and for some reason is willing to sell it to YOU for LESS money than can be gained from another buyer, buying for pennies on the dollar is merely YOU having a misunderstanding of what the market will bear. Home values rise and fall with the market, buying for pennies on what the home (USED TO BE WORTH) is not getting a good deal in my book.
- Buying For 30% Below List Price - This one is common. The seller is asking $300,000. Does buying the home for $210,000 make it a great deal? What if it is only worth $200,000? The seller's asking price is a number that the seller chose to ask. There is no law that says it has to be relevant to what the home might fetch in the market. Smart sellers price aggressively low and force many buyers to compete for their properties. This means it is possible to pay MORE than asking price for some homes and still get a great deal!
- Buying For 25% Less Than The Seller Paid When He Bought - One question we get often from buyers ... what did the seller pay for the home? While I think it is wise to get as much information as possible when buying a home, I also know that this number is irrelevant. The home has a value in today's market. If the seller (overpaid) when she purchased it, does it mean that you have to over-pay for it now? Conversely, if the seller stole the home when she bought it, does she have to pass the savings on to you? Of course not! And what about the home seller who put a lot of work into the home. You could very well find some great deals where you'll spend double what the seller paid. It's all relative to the value of the home in the market today. The seller will sell the home for as much as she can get under the constraints she must contend with during the sale of the home.
- Buying Foreclosures And Distressed Properties - You can find some great deals hiding in the foreclosures and other distressed property listings. And you can find duds too. One of the first thing new buyers want to see is these homes because they think they all are great deals. The fact is, each home stands alone and you have to evaluate it on its own merits. If you can buy a $300,000 home for $200,000, but it takes $90,000 worth of work and 5 months time before you can occupy it, is this a deal?
So the four methods shown above are often the methods buyers believe will find them a great deal, yet only the fourth one actually has merit. I just don't believe that the majority of home buyers have significant time on their hands (nor the desire) to do the work necessary in order to occupy a home in the future. As soon as you have to start hiring contracts and managing your purchase, the "savings" are truly money you have earned, not merely buying at a discount. And like many buyers have found, the costs often are much higher than they expected and thus the earnings were rarely as expected.
The Best Way To Get A Deal On Your Home Purchase
The goals and objectives of each buyer determines the parameters for measuring a great deal. For example, if you paid a few extra dollars to avoid having to put your current household items in storage before closing; could this still constitute a good deal? Of course. The buyer's situation is going to be critical when it comes to measuring the resulting deal that each buyer gets.
Financially, the best deals are those homes that are bought as a percentage of their current market value. If something is worth $300,000 in today's market and you purchase it for less than $300,000 without having to jump through any extraordinary hoops, than I would define this as a deal.
Remember, a home seller is trying to get as much money as possible, and there are now more buyers than sellers in today's market. The ability to get a great deal often times comes down to your preparation prior to entering the market.
5 Preparation Tips For Getting A Great Deal In Real Estate
- Interview highly trained real estate buyer agents first - The great thing for people buying a home is that the sellers out there are willing to pay for your agent. They are happy to pay your friend to help you, and they are just as happy to pay the world's greatest real estate negotiation team to work on your behalf to get you a better deal from them! Why work with an agent when you can hire an entire real estate company? Right? Read the reviews online before you hire a real estate company to help you. Get the best qualified team to make sure you get the best deal possible. And do this before you find the home you want!
- Work with your agent to identify your key constraints - Most buyers work backwards. They find a house and then they get a poorly trained real estate agent to help them negotiate for the home. Try this instead. After you hire your agent, spend an hour or so with her or him establishing EXACTLY what you want to accomplish and ask your agent to hold you to your goals when the emotion of home shopping starts to get crazy. Many buyers end up in the wrong home because they hired the wrong real estate agent to help them during the purchase process.
- Discuss negotiation techniques with your agent PRIOR to finding a home - A great real estate buyer's agent negotiates home sales almost daily, so there is no need for you to be surprised by the most effective techniques that he or she will use when it comes time for you to buy a home. Discuss these techniques ahead of time (like during the hiring interview ... this will help you determine the qualifications of your agent/company). A great buyer's agent will save you thousands of dollars during the negotiation process.
- Establish your "must haves" versus your "wants" - Too many buyers look at so many homes that they lose focus of priorities when it comes time to choose the house to buy. They start off looking for the "perfect" house, only to find it does not exist. Then they start assembling a "Frankenstein House" in their minds (choosing parts of one and adding it to favored features of another in order to determine the home they are seeking).
- Study and understand current market conditions - If you hire the right buyer's agent, they will spend a good deal of time, up front, with you so that you understand YOUR market. The market is fluid; it is not the same in all areas and all price ranges. You should know whether the home and neighborhood for which you are shopping favors the seller or the buyer. Will you likely have competition on the home that you find? Or will you be the only bidder? This information is vital for you to be able to get a great deal on a home.
I hope these tips and techniques will help you get a great deal when you buy a home. If you would like a smart, systematic way to prepare to get a great deal, just enroll in our free e-course below. 1 lesson will be sent to you each day for a month, at which time you will know more than 99% of the real estate agents about successfully buying a home. Take the course and then go out and get a great deal when you buy a home.
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This Week's Best Buys In Tallahassee
- A brick home on nearly 1/2 acre (IN-TOWN) for less than $200,000
- A large brick home in Midtown on more than a 1/2 acre for under $300,000
- A quaint home near Lafayette Park for $210,000
You can find these deals and more at the following links. Use these to find today's best buys:
- Homes Just Listed (Be the first, many of these sell in hours)
- Homes Back On The Market (Previous Buyer Failed To Close)
- Homes With Recent Price Reductions (Motivated Sellers?)