Can you really buy a house for below market price? The answer is yes! As an experienced Salt Lake City Real Estate agent, I’ll share with you some tips on buying a home at below the market price.
- Inheritance sales and/or probate sales: These are the easiest homes to get a huge discount on. There are technical differences between probate sales and inheritance sales, but the motivation is essentially the same. Normally, the heirs want to cash out of the house quickly. An administrator is the person in charge of the sale. Administrators generally have ample room to negotiate because the property has little or no debt. Additionally, these types of houses generally have little things wrong with them. For example, they may have older interiors that stop buyers from falling in love with the property and causing a bidding war. These houses are a good opportunity for buyers who can see past the wallpaper and shag carpet to negotiate strongly with willing sellers. I recently helped a client purchase a property for $15 per square foot less than market price because of this same dynamic. In part, it helped inspire this article.
- Handyman specials: These homes need improvements. These homes offer buyers a good chance to get a home at a discount. Most buyers are not able to see the potential a home may have, or they don’t want to spend the cash necessary to make the needed improvements. This means the pool of buyers is significantly smaller and all the buyers are expecting a discount. All of these things combine to create a great opportunity for prepared buyers.
- Timing: Buying at the right time can get you a great deal. The best time for a buyer is between late November and the end of December. The winter holidays provide an opportunity for deep discounts since sellers receive fewer offers from buyers. As a result, they will become more open to the offers that they receive. During the winter holidays, most people and their agents are busy with winter vacations and parties. In Salt Lake City, the winter also brings snow. This makes it harder to see the landscaping and the roof. For buyers who don’t lose focus, and for agents that work hard during the winter holidays, it’s a great time to get a good deal. When the first of the year comes, more people start shopping for homes again. As the snow clears, home buying picks up even more and then it peaks in June. July is often busy as well as families try to get a home under contract and purchased before the school year starts.
- Supply and demand: Use supply and demand to your benefit. If there are similar homes in the same neighborhood to choose from, then prices will go down as the buyer’s interest is diluted. This phenomenon occurs when, for whatever reason, multiple similar properties go on the market at the same time in the same neighborhood. Buyers can take advantage of this situation to get a property on the cheap.
- Vacant homes: Vacant houses that have been on the market for a long time are another great opportunity. By definition, the owners of these properties are not very interested in becoming landlords and want to sell. Houses that have been sitting on the market for a long time get few offers because most of the views happen when it first goes onto the market. Even if the property owner drops the price, the property can stay unnoticed. Buyers become less interested while sellers become more motivated the longer a property stays on the market. Even if the property is not vacant, properties that have been on the market for a long time still present opportunities for a good deal.
- The type of Salt Lake City Real Estate agent: A good Salt Lake City real estate agent will know how to get the house ready by having the interior and exterior ready. In addition, great marketing, and pricing the property to just slightly below what the market will bear, means the house will get a lot of attention and will sell for the highest price possible as buyers bid the price up to possibly above market prices. Thus, if the house has poor exposure, is messy, is difficult to show and has little interest, the chances a buyer can get this property for a good deal is greatly increased. Bad marketing of a home or a bad listing agent can mean a good deal for a buyer.
- Overpriced homes: When a house is overpriced, the agents know it, buyers know it and neighbors know it. Once a house becomes known for being overpriced, no one wants to be the one that ends up buying it for fear that it’s still overpriced. The overpriced house actually encourages buyers to place offers on other homes. Because the home has such little buyer interest, the sellers start to get worried. This effect is multiplied if the property is also vacant. These factors combine to create the possibility of a deep discount for a buyer. The seller ends up getting less for the home than if it had just been priced appropriately (slightly under market value) from the beginning.
A property can by bought at a price lower than the market price in Salt Lake City. It takes a Salt Lake City real estate agent that knows what he is doing and it needs the right combination of circumstances. For a smart buyer with a smart agent, you can sometimes find properties at a discount. Contact Buzz Storey for a Salt Lake City real estate agent that knows how to get you the best house at the best price and find you the hidden gems.