Finding Bargain Homes in This Market

You’ve been hearing it from a lot of sources, including us — the market has shifted, and is continuing to change. This is a big change from six months ago, when we had to offer $100,000 over asking price (literally!) for a client who was submitting their eighth offer, and that one finally got accepted.

Now, buyers have more bargaining power. It’s not completely lopsided, though. Maybe we should consider it a balanced market — sellers no longer have complete control, although some are probably hoping they can pull off some Jedi mind tricks like this. 🙂  (Thanks to Ryan Lundquist for this and a steady stream of amusing real estate memes!).

Here are some of our favorite strategies for finding a good bargain out there:

Look for properties that have lingered on the market for 30 days or more. You’ll be surprised, though, how hard this is — if you’re serious about bargains, you need to ignore that beautiful, nicely priced home that just came on the market yesterday. If it’s gorgeous, in a great location, and fairly priced, the odds are it’s still going to get multiple offers right now. But find something that’s been sitting for a month or more, and your chances of success go way up.

The good news is that the days-on-market statistics are rising quite a bit right now, and more of these properties are out there than at any time in the past two years.

Look for homes that fell out of escrow and are back on the market. A recent report by Redfin showed record numbers of homes falling out of contract this summer. When a seller loses a buyer, they can often be much more negotiable for a lower price. In that report, Sacramento was showing almost 20% of homes fell out of escrow in June.

Buy in late summer or fall. Home buying usually slows down this time of year, so this is working in your favor now, too. As buying has slowed, the inventory of available homes has risen quickly. We suggest summer through fall, because if you wait until winter, there are often just not many new listings on the market. Sellers don’t want to move during the holidays, and neither do many buyers.

Find a slight fixer-upper. There are plenty of homes out there that could use a kitchen or bath refresh or maybe a good paint job or flooring replacement. If you find one that’s livable while you spend a little time fixing it up, you may save a lot. If you can do some of the work yourself (hello, painting!) you can save even more. If you can save up some money from month to month, you can pace yourself and do projects without additional debt over time.

While you can see some of this information yourself in online listings, it helps to have a good agent helping you to identify possible bargain homes. As this market is shifting (everyone in this business is using the word “shift” these days!), we’re looking forward to helping folks find bargains. In the future, we may see more foreclosures (bank owned or HUD owned) and short sales (banks taking a lower price than the seller owes), but at this point in the market cycle, those are rare, because most homeowners have plenty of equity. 

Give us a shout if you’d like some help! Just reply to this email or use our contact info below.

As always, let us know if you have any questions or would like any real estate help!
Until next time, Steve & Santia