Buying a home is a huge purchase, so there’s no shame in taking steps to spend your money wisely. But, in seller’s markets like we’re seeing across most of the country right now, this task can feel unsurmountable. However, it’s still possible to get a deal on your home. You just have to be a smart shopper & be willing to do a little legwork in order to score a great sale price.
We’ve shared our best tips for finding the best deals available, even if the market is stacked against you. Use our suggestions to help put yourself in a strong position for negotiation:
1. Look for properties that have been sitting on the market
On Open Listings, every single property listing you encounter has a wealth of information to offer. When you’re looking to find a good deal on a house, one of the most important things to look for is “days on market.” As the name suggests, this feature tracks how long the seller has been marketing their home.
In this case, you’ll want to keep an eye out for homes that have been available for sale for a long time. Since those sellers have waited for a while without finding an acceptable offer, they may be more amenable to negotiating the price. In addition, you’ll want focus on homes that have undergone several price reductions or that have come on and off the market as those are also signs that the seller may be getting increasingly eager to make a move.
2. Find a “motivated seller”
“Motivated seller” is real estate jargon referring to a seller who needs to get out of his or her home in a hurry. Whatever the reasoning -- a new job, family responsibilities, or financial burden -- these sellers are going to be much more inclined to move fast and negotiate a lower sale price.
Seeing these words in a listing description is rare since sellers agents typically strive to keep their sellers’ interests close to the vest in order to secure the best deal possible. But, when these words pop up, there just might be a chance that the cards are tipped in your favor.
3. Consider buying a fixer upper
If you’ve seen a home design show recently, you know that the majority of homes fall into one of two categories: “move-in ready” or “fixer-upper.”
If you’re trying to save money, your best bet is to stick to the latter. Obviously, properties that need a little bit of extra TLC will have a lower sale price than those without any necessary repairs.
The key to your success, in this case, is to be realistic about your own abilities.
Often, buyers have a tendency to get themselves into trouble when they undertake repairs that are bigger than they can handle. For example, taking down wallpaper and other cosmetic tasks are much easier than structural and functional fixes like moving walls or updating plumbing.
Your home inspection report is the best tool you have for discovering the scope of necessary work before you fully commit to buying the home.
During the inspection contingency period, if you feel that there’s too much work to be done, you’re allowed to walk away from the home with your escrow deposit in hand. Make sure that you read the report fully and get appropriate work estimates so that you can feel confident going forward.
4. Look at non-traditional sales (but use caution)
Non-traditional sales -- or transactions as a result of a short sale, foreclosure, auction, etc - are often buyers’ go-to pick when they’re trying to save money. Unfortunately, though, these types of sales often end up costing much more than the initial sale price would suggest and most of that financial burden falls to the buyer. If you’re considering going this route, make sure you go in with eyes wide open.
Non-traditional sales happen when the lender agrees to take a loss on their loan to the seller. Since they're already losing out on some money, they’re even less likely to be open to negotiating than a normal seller would be.
As a result, buyers should be ready to shoulder the bulk of repair costs and transaction fees in addition to the sale price.
Since the exact terms of each of these sales will differ, the best advice that we can give is to stick to the offer agreement. That document will outline everything that will be expected of you as the buyer, if your offer gets accepted. Make sure you understand your responsibilities before signing on the dotted line.