by Stacy Francis, CFP®, CDFA
One of my best friends told me last night over tapas and sangria, that the time had come for her to purchase her first home.
She is well prepared: she has done all the research, checked off all the requirements for credit, income and money for a down payment, and thought about the future. She knows the importance of a great agent.
Now, did I have any tips for how to spot a bargain?
First of all, I told her, remember that a reduced price does not necessarily equal a good deal. Perhaps the house was overpriced from the start. Keeping this in mind, pay extra attention to the following types of listings:
- Old ads. A survey by online real estate agent Redfin suggested that a whopping 83% of heavily discounted homes have been on the market for 90 days or more.
- Estate sales. Chances are the sellers can’t wait to cash out. Plus, since they didn’t pay for the property, they may be less concerned about getting their initial investment back.
- Fixer-uppers. Many times, the fact that the owners are selling before making major repairs signal a preference for a fast sell over a high price.
- Recent purchases. If a house was purchased less than five years ago, chances are, the owners are either desperate house flippers or financially strapped and unable to make their mortgage payments.