Everybody wants a great deal, right? The problem lies in determining whether you first have a deal at all, and then further figuring out whether you have that really great deal. Where are you going to buy your property? What is your purpose?....Is it for your family, or for investment? There are many factors that will determine where to buy, but ultimately, it has to make sense to you. You can source your property through a realtor, you can look at private listings, you can look at completed listings on eBay, or look at Craigslist.com, zillow.com, redfin.com, realtor.com, and the list goes on and on. There are so many properties for sale that if you don't know what you're doing you can quickly get disoriented and make the wrong decision.
If you're buying for your family, you may have different factors to determine what your buying price will be and/or the location you want your home. If you're an investor looking for an income producing property, you have to buy right or you will lose money. This starts with comparing similar properties in the neighborhoods you are interested in and seeing what the "comps" really are and you need recent comps, which means sold within the last 90 days. If the sale date is much older than that, that's not a comp! You have to see what homes have been selling for and not what the ask prices are. Although almost no two houses are exactly the same, by comparing lot sizes, neighborhoods, house size, house design, etc. The more similarities the home you're looking at has to the ones that have sold nearby, the better a feel for the value of the home you will have. You can get comps through a realtor with whom you have a working relationship with, or through web sites such as zillow.com, eppraisal.com etc. Ideally, your local title insurance company (with whom you hopefully have a working relationship with) will have the best comps because their information will include private FSBO's (for sale by owner) properties which zillow and similar comps including those that you get from your realtor do not include. Be careful and get the best comp information you can get to determine market value.
The next step is to buy knowing what it's going to cost to bring the property up to good living standards. You need to know your numbers. Do you need to walk the property? Good idea. If you can't walk it because you're too far away, hire someone who you trust. You need to understand what it's going to cost to clean and fix, and/or rehab your home BEFORE you make an offer. In other words, get a good, reliable estimate of repairs. Even if you just need carpets and paint, you still need to factor in at least $10,000 for an average 3 bed / 2 bath home. Don't think you can get away with just a couple of thousand dollars because you'll likely be way off and end up paying too much for your home because you underestimated the repair costs. You have to factor in expected carrying costs if you're flipping the home, realtor commisions if applicable, closing costs and rehab costs. Now that you know all your costs to a fairly good accuracy, you can determine your strike price, which is the maximum price that you can pay for the house depending on what you want to do with it. If you're flipping or wholesaling, make sure that you have enough "room" in your price relative to the comps for the house so that you will make enough money to make it worthwhile.
For those people who are interested in buying a home for a deep discount wholesale price, with free and clear title, contact me as we have a direct link to substantial unadvertised REO's throughout the nation. You'll get a great deal and we'll give you inspection data to help you. Whether you're a wholesaler, investor or owner occupant, we will help you save big and give you a one-stop-shop. The only way we do deals is completely transparent and through escrow to protect you to ensure that your money goes exactly where it's supposed to.....the purchase of your home.
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