If you are in the market to buy a home today, and have the credit scores to be able to procure a home loan, then you are probably in the best possible time, place, and position to get a phenomenal deal on a house. As more and more people’s credit scores plunge due to foreclosure, then number of available buyers out there is rapidly decreasing. What this means for you is that you have less competition fighting you to buy that house.
Ok, so what does it mean, not having much competition fighting you to buy a house?
Well, what it means is that the seller is not looking at 3 different offers from other potential buyers besides you. Ultimately, this means that you have the opportunity to buy the house at a discount – if you so choose. But if realtors are involved, watch out, because they are trained to get the highest possible price, and they may try to make you believe that the seller won’t go for your low ball offer.
I had to learn this the hard way. The first investment deal I offered on was a 2,600 square foot house in a nice area of Temple, TX. Now, I had a real estate partner (he was a lousy business man) who took the seller’s agent’s swaying and pushed the price up more than I wanted to spend. The seller’s agent said things like “I don’t think she will go for that, but I will put the offer in front of her.” So we ended up spending more than we should have on this property. Well, needless to say, I have closed any dealings with that partner, and I don’t accept any pricing advise from any realtors that are outside of the realty I work for.
So the short of it is this, think about a number, make your offer, and don’t do a lot of negotiation. Set a highest number you are willing to give before you even send the first offer, and then don’t go over your highest number. Let the seller sweat, instead you doing the worrying about the house. You may really, really want the house, but I promise you there are other houses out there, and if the seller says no to your highest offer, there is another seller out there ready to make a deal. Trust me, I have worked several real estate deals in my neck of the woods, and sellers WILL negotiate. Many of the deals I have bought into are $10,000-$30,000 off the original purchase price. No baloney, the house I am living in now – the asking price was about $70,000, I bought it for $40,000, and had the seller pay $1,200 towards my closing costs. It can be done, but you have to focus. (see more on the key to real estate investing)…