If you’re in the market to buy a home, you should know exactly what you’re looking for. It’s not just about the price; a good deal can be about other factors, such as location, condition, rental income, or 100% financing. Whatever you’re looking for, knowing what you’re looking for is essential. If you don’t know what you’re looking for, have several back-up properties available. Having more than one property available to choose from will give you more negotiating leverage.
Bank Owned Properties
While buying real estate for sale is a complex process, banks often offer the best deals when purchasing bank-owned properties. Because these homes are in need of repairs and renovations, they must close their sales by a specific date. Late closings may incur penalties and the process could take weeks. This is why it is important to begin the process as early as possible. Using a website such as Mashvisor to search for bank-owned properties can be an excellent option.
REO listings can be found by searching online and through phone calls. Often, the bank that lent the money will list these properties. To find such properties, you should search using words such as foreclosures, REO, or bank-owned homes. Another option is to search on the MLS listing services, which is a national database that connects flat fee realtors, sellers, and buyers. Foreclosure listings can help you find the perfect bank-owned property. There are also services like Mashvisor that offer detailed analytics of house listings and neighborhoods.
Co-ops
While you might think that buying a co-op will mean lower monthly fees and better maintenance, there are some differences to keep in mind. A co-op is governed by a board of directors, which means that they make major purchase decisions. Unlike traditional real estate, the co-op board also decides on financial matters, such as who should pay for major repairs. Buying a co-op means that the board may have to approve major expenditures like a new roof, which will require the entire membership to chip in $10,000. Closing costs are also higher, averaging 8 to 10 percent of the overall purchase price.
Purchasing a co-op typically requires a higher down payment, usually around 20%, but buyers with good credit can sometimes capitalize on mortgages that require only three percent down. In addition to the higher down payment, co-ops require 20 to 50 percent deposits, and are usually quieter buildings. A buyer is required to pay the board’s approval for a co-op before closing, and the board is often very strict about vetting prospective buyers.
Off Market Properties
There are many benefits to buying real estate for sale off-market, such as lower competition, access to more pocket listings, and increased negotiating skills. This type of investment can boost your competitive edge, improve your cash flow, and diversify your portfolio. You may want to consider hiring a buyer’s agent. The more aggressive you are, the more likely you’ll find a great deal.
Getting to know other investors and professionals in your area can help you find off-market properties. Networking will open doors to thousands of properties and allow you to pick up properties that are not advertised. Be sure to make offers when it’s appropriate, and do not overextend yourself. Off-market properties may even be cheaper than on-market properties, so there’s no reason to wait.
Comparable Properties
The most common mistake buyers make when deciding on a property is relying solely on a computer-generated estimate. A more accurate approach is to use comparable properties, which are homes within 200 to 300 square feet of your own. You can find accurate comps by comparing similar properties in your area, and adjusting for differences in size, age, and other features. After comparing properties in your area, you should then choose a price range.
If a property has a wraparound porch and another property does not, then you can’t use it as a comp. However, if your subject property has a wraparound porch, you can add its value to its price. A pool, for example, could be worth $30,000.
Actively Make Offers
To win over the seller, you must actively make offers when buying real estate for sale. Make sure to update the status of your offer within 48 hours of acceptance. If your initial offer falls through, the seller may wish to have backup offers in case the first one fails to close. A flat fee realtor can communicate with other real estate agents on your behalf to help you win the property. Actively making offers when buying real estate for sale needs to be based on your true intentions.
