The housing market is rebounding, with prices on the rise in most metro areas, and inventory is noticeably tight as buyers scramble to enter the market before prices rise further and many would-be sellers sit and wait for higher prices. But there are still deals to be found out there, for savvy buyers who know what to look for when making a real estate investment. Not all sellers are brimming with intellect or experience, and spotting them from a distance means knowing who’s likely to accept those hard, fast, lowball offers. Here are seven signs to look for, to spot those not-so-savvy sellers and score a low price.
1. Frequent Price Drops
A sharp seller will make a substantial cut in pricing, after a reasonably long period on the market; they give it a fair chance to sell at an optimistic price, then cut it enough to draw considerable and renewed interest in the property. A nervous, anxious seller may snip the price down a little bit every few weeks, or may otherwise make multiple price cuts and tip their hand that they are desperate to sell. Lowball them and see what happens – the worst thing that can happen is they say no.
2. Odor Problems
All experienced real estate investors have walked into a home only to be hit by wall of stench. Savvy investors know that smells are only as bad as the cost of new carpeting and a paintjob, or perhaps as little as a steam cleaning and a few candles or plug-in deodorizers. But Prissy Ms. Homebuyer will be completely turned off, and will spin on her spike heels and walk right out the front door, creating a wonderful opportunity for those willing to invest in a little redressing.
3. No (or Unappealing) Photos
The Internet changed many things about homebuying, and do-it-yourself shopping online for real estate is one of them. People want to sit in their pajamas, browse listings, and email a few promising links to their Realtor for a showing tomorrow. A listing with no photos will not catch Mr. Pajama Homeshopper’s eye, but it catches the eye of good investors, who know enough to have their real estate agent call the listing agent to ask about the property’s condition and layout.
4. Sellers in a Hurry
Always ask why the sellers are selling; the listing agent may not offer a straight answer, but surprisingly often they will. Are the sellers skedaddling out of town for a new job? Perhaps a couple is going through a spite-filled divorce and have let their anger and indignation erode their judgment? Keep an eye out for sellers in a rush, because they may accept a super low offer just to move on.
5. Priced Too High, Too Long
Homes often sit on the market for a long time. Sometimes it simply means the seller is not in a rush and won’t sell for less than a perfect price, but sometimes the seller grows fatigued and will resign herself to a much lower price. If a home sits for a long time at one price, then drops, it is a good time to take a closer look at the property, and perhaps toss out a lowball offer.
6. Shoddy Upkeep
If the house and/or exterior grounds are not well kept, it will often turn potential buyers away. Look past the superficial layer of bad ‘70s shag carpeting and tacky pink bathrooms, and remember that beauty is both skin-deep and inexpensive to remedy in real estate.
7. Half-Hearted Heirs
Inheritors often don’t know, don’t care and don’t want to be bothered with the details of inherited properties, they just want a quick extra dollar in their pocket. Look for magic words like “estate sale”, or “owners lived here for 30 years,” or “needs a little updating/TCL,” and of course when asking about why the sellers are selling, the listing agent will almost always offer freely the information that the property is inherited. These heirs often have no emotional attachment to the property, and can sometimes be seduced by the promise a very quick sale. Consider lowball cash or hard money-financed offers with a promise to settle extremely quickly.