My intention with these weekly emails is to inform and entertain you. Following is a slightly edited version of an article I wrote for “Alameda Sun” a couple of years ago:

Where the Deals Are

When it comes to real estate, “How do I get a good deal?”, “How do I find a good deal?” and “How do I know it’s a good deal?” are the most common questions. The most vocal respondents to these queries (who are often trying to sell you a book or a seminar) advocate finding motivated sellers and using things like second deeds of trust and hard money loans to finance low-money or no-money down purchases.

There are certainly investors who have done well this way. The downside is the risk– you can lose your shirt and your credit rating if you don’t know what you’re doing. It’s also a labor intensive process where hours and days need to be spent learning about how creative financing works and then pounding the pavement to find that needle-in-a-haystack deal.

The easier, softer path is to look for a reasonably priced property that holds promise for better than average appreciation. Another is to develop some expertise at spotting a good deal when one comes up. Here are a handful of unusual ways to look for a good buy:

1. Wait until the end of the year. While fewer properties come on the market between Halloween and Christmas, many Realtors find the last quarter is their busiest time of the year. That’s because sellers are often more psychologically motivated to “get things wrapped up by Christmas.” Others have been advised by their accountants to unload their properties by year’s end. There are also not as many buyers to compete with, so the prospect of overbidding is lessened.

2. Look for properties that have been sitting on the market for awhile and have had the price reduced. An overpriced property that doesn’t sell within two to three weeks after hitting the market develops a stigma among nervous buyers. Even after the price is reduced to fair market value, they still think that if nobody else bought it there must be something wrong with it. Invariably, the minute someone with an eye for a value puts such a property under contract, it becomes the one that everyone else missed and looks like a sweet deal.

3.Check out new home developments. In a rising market, a carefully chosen new home can be a great opportunity, particularly if you’re not in a hurry to move. New homes are often being reserved for just a few thousand dollars before they’re built. Months later (be prepared to wait awhile because projects rarely finish on time) lucky buyers wind up with an opportunity to purchase something that’s already worth more than what they’re under contract to pay.

So there you have it— three ideas on how to find a bargain from another one of those “real estate experts.” Happy house hunting!

This entry was posted on Saturday, November 5th, 2005 at 12:00 pm and is filed under Buying Strategies, Investors. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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