Naturally, everyone wants to save money...especially when making a large purchase, such as a home. We all want the best home in the best neighborhood at the best price. Perhaps you think you have to shop the "bargain bin" to get a deal.
Although some people get lucky buying a bargain basement home, not everyone is so fortunate if you put price first. Here are five ways a low price can backfire on you:
1. The home doesn't suit your needs. A home is a good buy only if it suits your family's needs in regard to space, comfort, features, and function. Buying a home without enough bedrooms or bath is not comfortable or functional.
3. Bargains are rare. If a home is priced lower than others in the area, there's a reason. Foreclosure homes may appear to be a bargain compared to other similar homes, but there's usually a real difference in the way the property has been maintained. It's not much of a bargain when you find out all the copper wiring has been removed from the walls, appliances are gone, flooring has been torn up, and there are holes is every wall.
4. A bad fit costs you later. Once you decide to get out of a home that's too small, too old, or too far from where you need to be, you'll more than likely pay more in transactions costs to sell the home and buy another than if you'd chosen more wise in the first place.
4. You lose ground trying to lowball the seller. Just as you would want the home you buy to appreciate in value, the sellers bought that home as an investment, too. They want to net as much as possible as they've already taken on the risks of buying and maintaining the home. This makes them less willing to negotiate on a home that is well-priced and well-maintained.
If a property has been on the market for a long time without a price reduction, you are more than likely dealing with an unmotivated, unrealistic, or upside-down seller...which will waste your time unmercifully. These sellers won't negotiate to your level.
Foreclosure homes or a short sale could take months to close. During that time, interest rates could go up and that savings your thought you were getting could evaporate in higher interest payments.
As home prices are still below previous market highs and mortgage interest rates are still at historic lows...you're already buying a home at a bargain. The best strategy for today is not to try to beat the seller down, but to offer a fair price for the home you think is best for your family.
As an Accredited Buyers' Representative (ABR), I feel my biggest fiduciary duty to my clients is to ensure they do not overpay for a property.
JUDY WROZIER
(314) 348-4033
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