Why Chasing the Deal is Not The Way To Go… Most of the Time. 👀

Everyday, I meet another buyer or speak to another real estate broker that is not looking for a home, or a place to live but rather, a deal. And every day I get more and more frustrated trying to understand how they can possibly think this strategy is a good one for themselves or even for their clients.  Now you might be asking yourself why I would be saying this, or if I believe this theory applies to every client. The answer is no. Some people can shop for a deal, while others should be shopping with their immediate needs and wants. Let’s look at the major difference and get down to brass tax here.

To know why shopping for something isn’t the best idea first you need to understand exactly what that “something” means. A Deal is usually a property that is either over priced, not ideally located or has something wrong with it to begin with. This may seem strange when reading it but think of it… If it is a deal (in real estate at least) that means it has to have been sitting on the market for a while and not have sold… Whether it be because of the lot size, the divisions, room sizes or spiral staircase… there is usually always a reason why no one else wanted to purchase it within the first 120-150 days. Sometimes the only reason it seems like a deal is because it needs a heavy amount of renovations. Seldom do we see a deal where the vendor simply wants to “get rid” of the property at an amazing price for no reason with little work needed. So now, to properly understand…. A deal is usually something no one else wants. So who should be looking for one?

Someone shopping a deal on the real estate market should have three key points that make shopping for a deal possible.

1. No time delay – So they do not need to buy before a certain day

2. Not purchasing for personal use – meaning they won’t go live in the property

3. Have lots of experience with real estate.

Let’s start with 3 and run backwards. As you saw above, a deal is usually a property that needs work, or has certain issues or negative factors that not everyone can recognize. If you are shopping for a deal, you should have enough experience to know the weakness of the property you are looking at and what they are. By knowing how to identify these factors you can easily figure out how to fix them or get rid of them. The second important point is that, if you are not purchasing for personal use, then it means you have the ability to afford more than one property, can take on the holding costs and understand the risks associated with owning two properties. You can renovate, flip, burn it down and sell it for land, but not needing to live in it plays a big role in being able to look at buying the deal. Finally, you cannot be in a rush to find a “deal”… The best deals take a long time to show up and most of the time, they do not even end up on the real estate market… So if you are shopping for a deal, you need to have a lot more time than the average buyer, you cannot be moving in within 3 months.

Basically the opposite of the qualified deal hunter… But to get into a little more depth, So many people contact us on a weekly basis talking about making offers 50-60k under asking price on homes that we have just listed or have tons of activity on… The frustration we deal with as realtors is incredible on this topic… What makes you think that someone who just listed their home at X price is ready to drop 60,000$ in 26 days… As a broker why would I have even priced it that high if they were willing to drop that low?

Before contacting realtors, or asking your broker to put in a $60,000 under asking price offer on a property that has been on the market for less than 90 days – Make a quick phone call have a civil conversation with the other side to understand their situation and needs.. Maybe it can be a deal, but tossing numbers around and acting like its listed at the wrong price simply won’t get you what you are looking for.

If you are looking for a deal, then give us a call… Maybe we can help