Common Bargain Hunting Mistakes When Buying A Home
The Savvy Synopsis
Everyone wants a good deal, especially when you’re dealing with a purchase as significant as a house. But these mistakes might not actually be worth the ‘deal’ you’re getting in the long-run. Avoiding these bargain-hunting mistakes when you’re looking for the right home will help you make the best decision.
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1:08 – CAN YOU ASSUME THAT A SHORT SALE OR FORECLOSURE MEANS YOU’RE GETTING A GOOD DEAL?
- Are there many available deals in the Triangle?
- Why are foreclosures a good deal?
- Do they always go for asking price?
- What are short sales?
- Are short sales a great deal?
- An important thing to remember when searching these listings
5:28 - WILL YOU HAVE TO MAKE A BIG COMPROMISE
- How you can prepare for the possibility.
- Some things you need to remember about down the road.
- There’s one red flag you always need to pay attention to.
8:19 – COVETING ITEMS THAT DON’T CONVEY
- What’s the best way to negotiate personal items that you want included in the deal?
- How can these items impact your appraisal?
- Can this ever backfire?
- Angie shares a client example of a seller leaving behind items and the buyer was upset with the mess.
12:21 – UNREASONABLE REPAIR REQUESTS
- What’s the best approach if you see a lot of repairs done?
- Mistakes that can hurt your bargaining power
- Focus on these key areas first
13:50 – CAN OR SHOULD YOU WORK WITHOUT AN AGENT?
- What’s best in North Carolina?
- The benefits of having an agent
- Can you get a better deal without an agent?
- Your decision might actually effect the seller.
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Note: This is an automated transcription. Please forgive the robots as they tend to make some (a lot of) mistakes...
Speaker 2: what I want over
Speaker 1: pay for this.
Speaker 2: Let me ever pay for that time. Yeah,
Speaker 1: so what? We all want to get the home of our dreams, but we also want to be able to call it a steel to right. We want the ultimate win win. In that way, however, the pursuit of the perfect bargain home can backfire if you're not careful. Wanted to explore some of the ways buyers have shot themselves in the foot by making key mistakes in the hunt for a bargain by. And this is maybe not as common these days, and I feel like we used to talk about this a lot back when you first started your radio show before the housing market really started booming. But kind of assuming that buying a short sale or a foreclosure automatically means you're getting a good deal
Speaker 2: in our market. It's kind of funny, cause I get calls all of the time for from investors from other areas, other states who want to be in this area and they want to invest. And they say, Well, we want this great deal, you know, we want to make this amount of return on it, and, you know, we kind of we don't laugh. I almost that we laugh at them, but the market isn't there anymore. It really isn't and we are very limited on those type of inventory. Is that we have available. So when it comes to a foreclosure, I would say for the most part you are getting a deal. Whenever there's a foreclosure that is available. More than likely, the value is less than kind of the market value, but typically foreclosures in our market. If they are indeed in good condition, you know they will go quick and often times they go above asking price. So if you're looking at a foreclosure and is listed, just say 200,000. Don't think that you can go in and offer 1 80 I mean, once in a blue moon, Maybe. But more than likely, it's going above asking price just because they're so many investors or people that are looking to investor, even buy it as a primary residence but are willing to go above asking price to win out on that home. And then when it comes to a short sale, remember that a short sale, First of all, it's not a short process. Okay, I had a scene. Some short sales take more than a year. I've seen them take that long and then never close
Speaker 1: the show with long sale.
Speaker 2: Oh, it's yeah. Not a short sale. I think the quickest short so I've ever dealt with was 90 days, and that was from contract that close 90 days, where the norm is more 30 days. And so, with a short sale, though a short sale is, you know, of course, Ah, hardship that the seller has. They have to present what the hardship is. Ah, so that the bank approves of their short sale. But it all boils down to what the bank is willing to accept with them. It's a numbers game, and it has to make sense for them to accept the short sale. Otherwise, they'll just foreclosed on the home and they'll sell it on their own. So with the short sales, I don't always see that it's an amazing deal. Sometimes it can be a little bit below market value, but not always it really again. It depends on the banks numbers. You know what outstanding leans or taxes have to be paid off. H o a. Dues, you know. So there's a lot for the bank toe look at before they're accepting an offer, so those can be a great spot to find, as you know, for being bargains, but they're not always just as easy peasy. A straight board is what it might look.
Speaker 1: Yeah, it's a really good point, Angie. And so just be aware of when you see short sale foreclosure. You see those deals that might be too good to be true. Realize that it probably is just from the standpoint of theirs, that's not going to the final sales price often, right? Right. It's gonna be
Speaker 2: a competition. Yep. So with a short sale, the listing price and MLS is typically the price that the listing agent has put into MLS most of the time. That is not an approved price yet that has been determined with the bank. So although maybe you're listed at 200,000 maybe the bank really wants to 15 for this to work out, but with a foreclosure. That is the price that the bank has told the listing agent to put into Emma less So that's the number that yes, the bank will accept. But oftentimes we see that there could be multiple offers and that foreclosure can go above asking price.
Speaker 1: Yeah, it's need that you know, they've got these moving pieces and that they're these options for people, right? But it's just not. There's a lot more complications that come along with us short sale and foreclosures. If you're hunting for bargains, it's a good place to look what? Just realize you got a lot of other hands in the bargain bin. You're
Speaker 2: buying the home as is as well remember that.
Speaker 1: So it's gonna come with the Knicks in the dense. In this
Speaker 2: way, we can do your due diligence and inspections and all that good stuff. But you know, it's understood that you're accepting the home and as his condition and said there could be future repairs. Once you close on the home,
Speaker 1: another bargain hunting mistake might be making big compromises. Just a score. A deal. Oh, everything about this home is great. It's fantastic. But you know, the foundation needs major repairs or something, something like that. But to get in the home, gonna make this, I'll compromise, and we'll just deal with it. We'll fix it, you know, fill in the blank of whatever the problem or issue could be. Where have you seen people make big compromises? Just trying to score that good deal that you maybe had to kind of warn them against.
Speaker 2: Yeah, I've seen it. More of, you know, maybe they have there. Five must haves and they're quick to maybe just kind of push one of those must haves to the side because, wow, this is a great deal. But, you know, remember, some of those must haves are important in our things that potentially you can't change once you close in the home, for example. You know, I've seen some homes and it looks like, Wow, this is just price so low, but below you know, the market value in the neighborhood. But you get out to the home and there's no backyard or just drops off. And although yes, you're getting it looks like a great deal based on what other homes have sold for in the neighborhood. You now don't have a backyard for your kids to run around in. And that's, you know, maybe long term, can you adjust that and change it? But I bet you're going to be dumping a lot of money and to bring in endure building a retaining wall, you know? So be cautious on focusing too much on just getting this bargain, getting this great deal where things that are important to you get put, you know, kinda to the waistline. Because oftentimes those are things that you can't change. Maybe it's the floor plan is just It's the weirdest time ever write, You know, you can't go in and just completely rearranged a floor plan. By the time you do that, once again, you spent more money than what the home was even, you know, market value worth. So be cautious on searching too much for a great deal where you're not focusing on what's most important for you as a homeowner.
Speaker 1: Yeah, that's actually you bring up a great point there. I was thinking, compromising, really just in terms of repairs and that kind of thing. But you're right, compromising on kind of what you want, because you like other aspects. But, you know, then you don't get in that home and then really regret. You know, we we really wanted this in home. Why didn't we value that? We would compromise for all these other things. And we didn't value this enough. That was really more important to us than we made it. And we should have compromised on that key element, you know,
Speaker 2: And I mean repairs or one of those to be cautious on to me, you're not getting that great of a bargain. If there's all these repairs that are lingering, right, because those can quickly add up. You know, be careful there to foundation issue. I mean, that's a big red flag to me where it could be, there could be nothing wrong, or it could easily be a $30,000 fix. So, you know, make sure that you are doing enough to diligence and research to make sure that you're buying also a sound home, right?
Speaker 1: This one seems as another bargain hunting mistake. It kind of seems silly, but coveting owner belongings that don't normally convey. You know, I guess this would be like, you know, Hey, we want the we want the drapes. So I like the TV that you've got. Do you know, mounted up there on the wall, too. Let's let have that stay behind and the butcher block. We wanna keep that, too. And, hey, there's a ping pong table in the basement. And we have that too,
Speaker 2: you know? Actually, I this happens a lot, but I've seen that it actually can work against the buyer. The reason being is those are personal items of the seller, and the value that they put on those items, I bet, is completely different than the value you see in them. Same thing, just as like a fridge or washer and dryer in the mindset of the sellers. Will it cost me this amount of money toe by those, but to a buyer, you know, those have no value to them. Oh, just throw them into the deal. So whenever it comes, Thio, you know, maybe trying to negotiate in belongings or personal items of the cellar actually highly suggest that we leave that outside of the contract. You know, you could do a separate bill of sale between yourself in the cellar for any additional items. But, you know, let's focus on writing up an offer and getting you the best deal on the actual home. And then, if you want to buy things separately, you know, from the cellar, do that outside. And also, if you are obtaining financing, lenders don't like to see all the extra kind of mess on a contract. The reason being is because whenever the appraiser comes out to appraise the home. How did they give value for a pool table? How did they get value for a recliner? You know they can't. So they actually can kick back the contract and ask those items to be removed. So you know, when it comes to negotiating an offer and getting the best price for yourself, actually, leave off those you know? Ah, belongings of the cellar. Because I think that actually can hurt your bargaining power more than help you
Speaker 1: when we bought our most ah, are our new home. Last year it was funny because leading up to the closing date, the sellers and I were texting back and forth. And do you Hey, do you want to just leave this behind? Hey, how about this? You want to leave this behind? Hey, we have a piano. You want. Just leave this behind. Yeah, sure. And that's okay, but I need that. Sure. That'd be great. Okay, your
Speaker 2: guns is a win win, right? Right. But I've seen it kind of backfire. And, you know, Seller gets all uproar that No, no, you know, you can't have that to you. And because once again, it's it's special to them.
Speaker 1: It's also really funny, though from from from that perspective like one, it's great because there was some things like the furniture out back. They left us a lot of like, you know, they had left a couple of umbrellas and, like dining sets out back, you know, in the big patio, backyard area and some outdoor furniture and seedings. It was great. We have to go, like, you know, populate the backyard with places to sit in that kind of thing. Already we had all these options already, so that was kind of nice. And it was just kind of like, You know, we'll see the condition of it when we move in, and then we want to keep. We can keep on what we don't we don't And, um, it's just really funny, though, because you also have this perspective of where you're like, Yeah, leave it, leave it, leave it, leave it. That's fine. Now we're like, totally regretting that we have the piano appear and we're like we should probably get rid of the piano and the things like 1000 pounds. It's like it's a hassle to get rid of
Speaker 2: Yeah, well, I mean, yeah, it depends on the buyer, and the seller is yours. You know, one of these things behind. You know, not I've seen on the flip side. I've seen some sellers too. This happened to us. Unfortunately, recently were a seller left behind items and buyer gives in to move into the home. And they are livid because it wasn't things that they wanted to be.
Speaker 1: That that that that becomes Yeah. Yeah, exactly. Like the cellar ran out of time to move the rest of the stuff out. So they were just like, Well, we're just gonna leave it
Speaker 2: right? Exactly.
Speaker 1: That happens. And so that's one of the thing. They're certainly the coveting of owner belongings that don't normally convey. Just be careful, getting too picky on all that stuff, making unreasonable repair quests. I think we should also throw on the list here. So you look for that bargain. We get into that repair conversation and you just ask for every single little tiny repair to be made to the home.
Speaker 2: Yeah, I've actually seen that. It can backfire on you, So if you have a list of maybe 10 items on your inspection report instead of going in and ask him for all 10 items. Focus on what's most important to you as a buyer. In the reason being, if you present over all 10 items, you say, I want all these fix. I bet you anything the seller is going to be not so happy and come back and say, All right, I'll just fix one of these items. It's kind of like making a low ball offer that's very insulting to the cellar is the same way when it comes to negotiating inspections and repairs. You know, do not be unrealistic because you can actually hurt your bargaining power in your negotiations by looking like unrealistic buyer sellers get offensive because to them, they've kept the home in amazing condition. But you've now just told them that their home is a piece of junk. Um, and you're being unrealistic. So I bet you the seller is going to come back and be unrealistic as well. So yes, don't make unreasonable repair requests. Focus on the major items. If there's plumbing electrical H back Ruth, you know, foundation those air major, If you have a squeaky door, you know what I bet you can take care of that after closing.
Speaker 1: Yeah, There you go. There's certain things that can certainly wait Last but not least, Angie. Bargain hunting mistake. Maybe the big one of them all working alone without an agent and talk about silly mistakes. I mean, it's free representation in North Carolina tohave an agent on your side as a buyer. So why wouldn't you utilize that? Great. Sure,
Speaker 2: Yeah, yeah, exactly. And you know, every state, the state is different, so it's not the same. And I think that's something that some buyers aren't aware of that in North Carolina, it's understood that it's free representation, because when a cellar goes to sell their home, they have an agreement directly with their listing agent of the total compensation being paid. And that includes both to pay for their listing agent and also to pay for the selling agent that is occurring cause of this sale. Who brings the buyer to the table? So it is silly, not tohave an agent looking out for you and your best interest to negotiate on your behalf, making sure you're being ah represented, how you should be and just all the steps are being taken throughout the process. Remember, if you don't have an agent, it doesn't mean that you're going to get a better deal. I know, for example, if a buyer comes to me and they make an offer from one of my listings and they are unrepresented, I'm not going Thio, you know, that's Ah first, all the commission agreement is between me and my cellar. I am not going to now reduce my commission by like the buying Agent Commission because they don't have representation. And the reason being is because I'm doing so much more work because they do not have representation on their end. So it's actually more work for the listing agent when you don't have representation and take advantage of it. I mean, it is understood in North Carolina that you know buyers, they have agents, and it is free representation for them.
Speaker 1: You've been listening to the savvy real tour podcast on Walter store Holt alongside Angie Cole. She's the owner and broker in charge of a co realty here in the triangle. And if you have questions for Angie, we invite you to go online to a coal realty dot com. Listen to past podcast episodes on the website. Read the block and all the great information, including the option to find a home right there on the Web site. That's a coal realty dot com, and you can also call Angie with your questions. 919578 31 28
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