The myth of "the steal" in real estate...

Jerry - you certainly hit the nail on the head with this one ..... todays market is great for those taking the realistic approach ..... they know they are already getting a bargain with great financing rates ..... they also know that it will take time to benefit from their home or investment property purchase.

This is an excellent post and one I wish all buyers would have the opportunity to see.

I've been a seller recently and can't tell you how many low ball offers we got - hundreds of thousands of dollars less- based on nothing but fantasy not the realities of the market. They wasted my time by wanting 3 showings... wasted their agents time,,, wasted my agents time... wasted a whole lot of paper (poor trees)... what a waste of energy in general. Needless to say our house sold for 99% of asking since it was priced at market value. I suppose all those "deal finders" are still renting...

I really agree with this statement, "This is a buy and hold market.  Not a flippers market." We need to spread this one around.

Jerry I'm not running into local buyers anymore that are looking for that 'steal' in the Phoenix area. Locals know that if the home is priced right it's going to sell fast and most likely with multiple bids. Give it your highest and best is what I suggest if the home is the right one for them. Snooze you lose.

Hi Jerry, just yesterday, I received a call from someone who was looking for a "steal" and a "smokin' deal".  In the course of the conversation, it became quite clear, he was not really a committed buyer but just "someone who would thinks they might want to look at something to buy if the price is right...".  Oh, very often, customers like this also don't have any other way to be contacted other than wanting to be called and of course, they are keeping their options open to work with anyone who will call them.  At this point, they really are not ready, willing, or able to buy. 

Jerry - There are many who don't understand the market and then there are others like investors who buy, rehab and thereby make a profit.

I think your statement that in buying low they set a new floor is an important one to share with buyers.

Point somewhat taken but not completely agreed to.

I managed to make an investor 50% return on 2 flips this month in less than 60 days.

I don't know about you but I can't think of any other investment vessal other than real estate where you can make 50% profit for 60 days work.

It only takes a well informed realtor and an investor that is willing to listen and pull the trigger when I hand them the gun.

Jerry, CONGRATS on the featured post!

I believe that steals are there, if you look hard enough, want to put the effort into it, and are the most attractive offer when you are competing with multiple offers.

There will always be steals out there.

I don't believe that there will always be as good of a time to buy them, though.  For those looking for them, they exist.

I don't like selling them because normally they come with alot of items that unless you're a seasoned flipper or rehabber, you probably aren't going to be able to get some of this dirt out from under your nails for a while.

Thank You for this wonderful synopsis!

I think the steals and deals depend on your market, obviously.  Most sellers in our market do not have the equity to lower prices much.  There are some "steals" in VA and other foreclosures, but not the 50% below market that a lot of buyers are wishing to find.  Serious investors, who are in it for the long term, should be buying now with these low interest rates and low prices, and they are!

Jerry, I could not agree with you more, the real deal is finding a property that is worth the money, and paying the asking price. I had a buyer bypass a listed "Steal", just because he wanted to offer $30K below asking price, while the asking price was already $0K to $50K below the neighborhood. The property needed a bit of work, maybe $5000 and you could sell it at asking price in the neighborhood, or rent it for a couple of years.

I often wonder why people don't listen to our advise, when they ask for it??

Excellent post Jerry, and very well stated.  No matter how often we tell the bargain hunters these points, they just don't understand.  For those, that end up with a perceived 'steal' it's never the bargain that they thought it was.

Jerry - this is so true, and in most cases, it's hard to not get a great deal today. I have a lot of buyers looking for that diamond, but they don't want it in the rough, they want it nice and polished but priced like coal. Get post, reblogged.

I've seen too many buyers lose out on a house they wanted...for themselves, not for an investment, because they wanted to pay the "how low will you go game" with the seller. When the house is a good deal, you are right, many see this opportunity and they don't play around with the price. They buy the house.

Great post.  In my area, buyers who make low ball offers will simply see the property go to CASH investors. 

THANK YOU INVISIBLE_HAND!!! If more agents understood what you have very skillfully put forth, maybe just maybe they wouldn't act like spoiled children that don't get their way.

Why not provide the "Illusion" of a steal by having the seller pick up the settlement charges with a full price offer.  Lower cost of acquisition to the buyer, allows them to use those funds to make improvements to the property (which it may need anyway) equals an increase in market value and increase in re-sale price or higher rental income.

Their transaction becomes the basis for the next supporting appraisal in that market area and we just might begin to see some stabilization if this method were adopted.

Let them get their "Steal" in pieces, some at acquisition, some during rehab and some at re-sale.  Total it up and I think they will come out better in the end with a lot smoother transaction.

Just a thought.  If you would like to discuss how to structure or get a copy of the lender guidelines for owner occupied, second home and investor purchases, shoot me an email.

Jerry, Very nice article and very well written. So true. If you are out there waiting for the steal you are goin gto be missing out on a lot of very good deals.