Archive for the 'Buy and Sell for Less' Category
A brilliant new hud auction information page has launched, covering information on how to bid on hud homes in Utah. I reccomend giving it a read, as there is a lot of good information covered there.
Don’t be Superstitious
Everyone has some degree of superstitious beliefs. That’s fine, and should be exploited to get you a better deal on that home. That home being sold 20k under asking because of an double homicide, or even that bedroom that doesn’t face east should never affect your purchasing feelings. While some states, like Utah, prevent negative stereotypes from being mentioned in a home sale, others mandate disclosure of such unsavory details. Find the haunted house that just won’t sell and you’ll have yourself a deal.
Make your Agent EARN their Commission
Most agents are desperate for clients, and will happily agree to scan the MLS and let you know when they find a deal. Be careful to explain to the agent specifically what you’re looking for, but avoid giving a price window. Saying a maximum price may tempt your agent to simply find the first home in that price range and pressure you to purchase, wasting everyone’s time.
I have personally struggled in past before I became an agent to find another real estate agent who could competently pass on the deals to me. I recall one agent who I asked to keep their eyes open over the next year or two and let me know if any deals ever came up. First thing the next morning I got a call from that same agent telling me that, surprise surprise, he had found a half million dollar home that was perfect for me as an investment. (half a million was a fortune in Utah at the time for a home). Sadly, the home was a complete waste of money, and the agent proved useless.
Finding a good real estate agent in Utah can be tough, as well as in any other part of the nation. But if you succeed, you’ll have an employee essentially scanning the MLS and bringing you the best deals in the market, which do exist.
Look for a Reasonable Fixer Upper.
Keep in mind there is a fine line between reasonable and an out of your league project. Look for a home that just needs some paint and flooring, nothing too big, and preferably just cosmetic repairs. Almost anyone can handle those. Bigger projects like roofs and add-ons can quickly spiral out of control cost wise.
If you have cash, and can pull off the repairs without putting yourself into debt, you can usually fix a home up very nicely and make a fair gain for your work and time.
An example of this would be two homes in a fast improving neighborhood. One of them, in excellent condition, sells for $250,000. Knowing this you see a home of similar size, close by, that is listed for $199,000. Assuming the home is structurally sound, much can be done to improve the appearance of the home with some simple sweat. $10,000 of paint and cosmetic repairs could reasonably see your house selling for $250,000 when all is said and done.
Buying a New Development Cheap
If you choose to ignore my warnings and go hunting for a new home, try this strategy for getting a new home for less. Hunt for a new subdivision going up in an attractive area. Walk the neighborhood, and get a feel for its value.
You should be able to locate the contact information for a few of the builders in the area. Contact them and state that you would be willing to purchase one of their model homes. These homes are used to showcase the development to other buyers interested in the new homes. These are usually the first homes completed in the development. Negotiate an option to buy at a lower price than what the other homes will be listed at, and then have the builder pay you rent while using the model home as a showcase (generally for a few months to a year’s time). If contacted early enough, the builder should be overjoyed to be able to sell the model, and will be able to offer preferential treatment.
If done correctly, you will be able to buy a home with instant equity (rare for a new development) as well as maintain cashflow for the first few months time. You’ll likely still have to hold the property for a few years to see enough profit to justify the expense of selling, but this definitely beats paying retail for a new home.