So what is a deal anyway? Often I have heard from buyers that they will buy a property as long as they can get, "a good deal on it." So the question, "What is a deal?" needs to be clarified. For some it is buying a house "below market value." For others it is, "a property that can be fixed up and resold in a short period of time for a profit." For others it is "a place tomake our home that we can afford comfortably." and for others it is a property that can be bought and rented for close to the mortgage payment.
Here is the dilemma. All of these different buyers are looking at the very same property and sometimes end up competing with each other. Yes even in this "buyer's market" we are seeing multiple offers on properties priced at or below the perceived market value.
So lets take a look at each of these suggested "good deals."
"Below market value" seems to be the most common sought after "deal." Your agent should, as a standard of practice, show you the comparable properties that have sold, are active on the market, under contract, canceled and even expired without selling. This information should assist you in establishing with relative certainty, what "market value" of a property is. Remember, this is not an exact science and "the market" is a constantly changing target. Space here does not allow me to go into all the nuances of a "Market Analysis" but as always, contact me and I will be more than happy to explain the whole process to you.
The next goal is what some call a "fix and flip" deal. This is buying hoping to accomplish a few repairs and then sell the property in a short period of time and make a nice little profit. This was pretty easy in ‘04-‘05 when it seemed like this process was as easy as bobbing for water. (You can't miss when all your going after is the water.) But most of the profit seen in those "wonder years" was more market hysteria than actual value received and in case you missed every news report for the past two years, this is not happening right now. This means you have to buy the property very right. Your most likely properties for this are repossessed properties but Be careful, there are any number of pitfalls the seller may not be telling you. It is amazing to me the amount of ignorance in the industry regarding disclosure of material matters with a property and so contrary to what you may have been lead to believe, a bank selling a property has the same obligation to disclose material matters as any other seller in Arizona does once they are the owner of the property. Your agent should know how to deal with these issues with the Bank/sellers to protect your interests. No matter what property you are looking to buy, it is always important to have an inspection done on a property but it would be twice as foolish to purchase a" repo" without a thorough inspection. It would also be a good idea to have a general contractor provide you with a solid estimate of costs to complete the "rehabbing" of the property. Be careful not to get carried away with these projects as you can overbuild for the area. Again call me to receive a list of projects that are most beneficial to a good return on the investment.
For those looking for a place to put their family, a lot has to do with individual talents, financing terms they qualify for, and how soon they need to move. FHA financing has riased their loan limits to just under $350,000, but FHA won't lend money on a "fixer upper" except under specific 203k guidelines. (See Troy Gardner's contact info and give him a call on this program) A typical resale property is the more likely property for this buyer and the price may be a little more than a repo but full disclosure, past history of insurance claims and repairs etc. do add value to the property and so may be offsetting penalties to the price, making this a "good deal" even at the higher price.
The rental buyer needs to keep all these little "beware" items in mind. Any remodeling needs to be done with durability in mind. This plus keeping in mind you as a landlord will be responsible for most repairs before during and after the property is rented and knowing how long items tend to last and the age of the property . Call me if you are interested in getting "Life Expectancy of Home Components" booklet.
This and other quick tips posted here and on the web in general are by no means meant to replace an in office consultation. They are very general in nature and are only meant to provide general information. With market changes the information changes as well and so what may be true today may not be accurate tomorrow.
With all this in mind, please remember, I always have time for you and your referrals and look forward to hearing from you.
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