When is a bargain not a bargain? As a buyers agent we get asked all the time to "Find us a bargain" I always respond with "what is your definition of a bargain" Many times they will say they want a home at half price and usually these are first time
buyers that are listening to the real estate investment "gurus" that probably have never bought a so-called bargain home themselves. The reality is that most of the homes that buyers want in the Denver market are priced at fair market value. First time home buyers are probably the most likely to express this, they want nice amenities yet they think they can steal the good homes, and are disappointed when multiple offers come in on the home that they really like.
We do our best to educate buyers as to the realities, that the homes that have bargain prices, usually come with a laundry list of items that will require immediate attention and then the bargain price slowly fades into "after I do all that work, I could buy the home down the street for $50K more and be better off." Yessir that is the reality. Or they may have other unknown issues that will keep the value down forever as well.
Another "bargain" home is the really nice home in the neighborhood that is full of foreclosures and short sales, not a home that will appreciate in value in the near future, in fact it will probably take several years to ragain its purchase price if the rest of the neighborhood is distressed.
The "true Bargains" are the smallest homes, or the least expensive nice home in a much nicer area, for example, if you want to spend $250K on a house do not buy the 3000 square foot 2008 model that is surrounded by $175K REO's and short sales, that will be similar to buying a new car, instant depreciation once you drive it off the lot. Instead, find the $250K home in the neighborhood that has prices ranging from $250-400K, these higher priced homes will help bring your values up almost immediately, and even if your house really is only a $250K home you will still benefit from the rest of the neighborhood.
When we work with buyers we like to advise them that the home they are buying is not only a home that you can enjoy for years to come, but also an investment and when it is time to sell you should be able make better than market returns on your investment, that is, we try to help our buyers find the best investment as well as the best home.
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