February 28, 2011

It's Only A Deal If You Buy

In the past couple of years, how many times, as agents, has a buyer said to you, "I'm looking for deal!"  Hey, in the current market, with the national media spewing all the negative they can muster on the housing industry, everybody is looking for a deal now, right?


Value MenuSome buyers looking for a deal get that in order to get a real deal they will likely be giving up some things.  Buying off of the value meal is great for your pocket book, but let's face it a regular cheeseburger is missing some of the bells and whistles of a Big Mac!

Same thing applies to the deals in real estate.  They're deals because they don't have everything needed in order to sell for top dollar.  Because of that, a buyer can frequently get the property for less, sometimes a lot less than current market value.

Some buyers, though, think that "getting a deal" means offering half price or less on everything, regardless of asking price, condition, etc.  Often, these buyers end up getting frustrated with the market, their agent, their spouses, everybody, because they never get The Deal.  Many, many times, they miss out on the real deals because they are too busy trying to beat up the seller on price.

Some examples:
A foreclosed doublewide, in move-in condition, on 1.5 acres with a 20 foot wide creek bordering the property came on the market for $26,000.  Market value for the Hickory NC area, a conservative $100-125,000 as it sat.  In the 15 minutes a waited there for my buyer to show, 3 people stopped by to look at it.  I informed my buyer of this and that I felt that it would have multiple offers on it by the end of the day and that it would probably sell for between $40-50,000.  "Let's offer $20,000," my buyer said.  He didn't get it.

A 1200 square foot house on 9+ acres in a gated community (5 houses in all) came up for $90,000.  House needed a bit of work, but livable as-is.  Put $10K in the house and you've got property easily worth $175-200,000.  The buyers offered $55,000.  They didn't get it.

The point:  these were houses that came on the market as a real deal.  They were priced right to move fast and they sold for more than asking price.  The buyers that made the winning offers understood that, followed their agents advice and used their agent's knowledge of the area to get a real deal.

The buyers that made the lowball offers on an already great deal are still searching for the needle in the haystack seller where no other buyer is willing to offer anything higher than half-price.  It's a long wait.

So, if you're searching for a deal, remember not to try to step over one of thesedollar bill  in order to pick up one of these A Dime

Or...It's Only A Deal if You Buy

'Value Menu' courtesy of krossbow

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