Finding a Real Estate Bargain

Are you looking for a bargain real estate property? Before I can find you a "bargain", we need to decide what you consider a "bargain". To a certain extent a "bargain" or a "really good deal" is in the eye of the beholder. What do you consider to be a really good deal? Is it just price? In Austin, the months of inventory and average days on market vary tremendously by price range and area. Subtle differences such as which elementary or high school or location with respect to a road can account for price differences.

Sometimes a home that appears to be a bargain on paper turns out to have a "flaw" that can never be fixed such as a dysfunctional floor plan, a very busy street, an incredibly steep driveway, almost zero sq ft of usable back yard, highway noise, proximity and/or view of power lines or commercial property. You may not care about a particular issue that hurts the resale value so as long as that issue is factored into the price, in which case that property may be a "bargain" for you. 

Good deals tend to occur in one of three ways:

1. A property that most people would consider a bargain often sells within hours of coming on the market. Either the Seller needed to move the property rapidly or the property had features that were very difficult to find. It is rare that a real estate agent under-prices a property out of lack of knowledge.
2. Properties that were initially over-priced and have been on the market with numerous price reductions can sometimes be negotiated down to a bargain level because the Seller has either run out of time or is just tired of the whole process and wants to be done with it.
3. Some properties have hidden potential such as a house on a lot large enough to subdivide or a house that is easy and cost effective to renovate. 

A good Buyer's agent has the ability to evaluate the resale potential of a given piece of property and also probe the listing agent for useful information with respect to negotiations.

Keep in mind that negotiations don't end with a contract. Do you really want the Seller fixing problems that turn up as a result of the home inspection or would you rather have the Seller pay some of your closing costs and you take care of the repairs with the cash you just saved? Negotiating a really good deal is an art rather than a science and not all experienced agents are good negotiators. Ask the agent how they go about evaluating the value of a property and then listen very closely to that agent's answer.

Sometimes finding a "good deal" means that the Buyer pays market price. Regardless of what is going on in the national economy, there will always be neighborhoods that sell well and appreciate just as there will be neighborhoods that depreciate. Local conditions almost always have a greater influence on prices and trends than do national conditions. A good agent can not predict the fate of every neighborhood and price range so if you ask about particular neighborhoods the agent will most likely say he/she doesn't know.  Instead, the question to ask an agent is: "Which neighborhoods do you see appreciating over the next few years and what makes you think they will appreciate?" Then listen to the answer and ask yourself whether the agent's answer makes sense.