Where the Deals Are Hiding

Image by zoomar via Flickr

If you are in the process of buying a house right now, you may be wondering where the deals are. Many properties still seem to be listed higher than you would expect, given all the national news about the real estate market. Some buyers have even decided to stay out of the market, hoping that asking prices will drop further. The problem with waiting, of course, is you might miss the bottom – only to realize too late that prices have gone back up again. Your other risk in waiting is that interest rates, still at historical lows, may also go back up again. I’d like to offer a more pro-active suggestion, which is based on our local market statistics.

What I have found is that the deals are hiding in the sold properties. In other words, properties are not necessarily listed at deal prices, but they are selling at deal prices. On average, in the $50k-$100k price range, properties are selling at around 85% of asking price. Statistics show us averages, but keep in mind that the average represents two ends of the spectrum. On the one end are sellers that offer a great property at a competitive price; their houses are selling quickly for close to asking price. But on the other end are properties that are selling below asking price – probably less than 85% of asking price.

So, let’s say you can afford a mortgage on a property for $85,000. If I were your real estate agent, I would recommend that you look at properties priced at least up to $100,000. Why? Because if you made an offer of $85k on a property listed at $100k, that is 85% of asking price – which is the average a seller can expect. Now, I am not saying that you can get any $100k property for $85k. As I mentioned, some properties out there are already priced competitively and they are probably going to sell for close to that price. But you never know how much a seller is willing to negotiate until you submit an offer.

Having said all of this, I should mention that properties listed in the range of $150k up to $300k are seeing an average sale price around 91% to 92% of asking price. While from a percentage standpoint, the discount is not as significant as properties listed in the under $100k range, from a savings standpoint, the average buyer is saving around $14,000 to $24,000 off of asking price – so it’s still worth a look!