It’s not always enough to be up to snuff on negotiating that reduced price. Sometimes you need to know where to look to find a bargain that’s already available.
Redfin’s “Science of Real Estate” center studied the differences between homes that sold for a large discount and those that didn’t, and came up with guidance for buyers looking for large discounts.
“Homebuyers have begun crawling out of their bomb shelters hungry for big discounts off the asking price,” said Redfin CEO Glenn Kelman.
“Often, their expectations are unrealistic, as many sellers have already aggressively priced their homes. But when conditions are right, we’ve found that a small but significant number of sellers concede $50,000 or more at the negotiating table. We’ve tried to take the mystery out of when a seller will give ground and when they will stand firm,” Kelman said.
The recommendations aren’t negotiating tips but “where-to-look-for-bargains” tips.
Redfin says:
Look for languishing listings. Heavily discounted homes are 83 percent more likely to have been on the market for 90 days or more. Most sellers will hesitate to accept a low offer if the property has been on the market for only a few weeks.
Find fixer-uppers. Heavily discounted homes are 73 percent more likely to need some fixing up. People who sell homes before fixing them up are usually more concerned about speedy selling than peak price. Get the home inspected before you buy so you know exactly what needs work.
Retreat from remodels. Heavily discounted homes are 20 percent less likely to feature a noteworthy remodel. This also means sellers who sink money into major remodels before they list could be missing out on certain buyers.
Hunt homes with long-time owners. Heavily discounted homes are 52 percent more likely to have been seller-owned for 20 years or more. The longer a seller has owned a property, the more equity he has likely accumulated, and the more likely he is to make significant price concessions.
Put your finger on a flip. On the other hand, heavily discounted homes are 9 percent more likely to have been owned for less than five years. A home owner or investor in trouble may be motivated by the need to quickly reclaim capital, rather than wait for equity growth.
Don’t bank on bigger bargains from bank-owned homes. Heavily discounted homes are 9 percent more likely to be a short sale or bank-owned. Banks lower prices as much as possible from the beginning to unload distressed properties as quickly as possible, but no so much to take more of a loss than is necessary.
Written by Broderick Perkins
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Great blog you’ve got here – Our housing market has become extremely sluggish – Hopefully things will begin picking back up