How to find a bargain home in a seller's market

Written by Posted On Thursday, 15 March 2018 15:53
We found a deal! We found a deal!

So how do you find a bargain home in a seller's market?  Especially when all the real nice homes at selling near or above list price.  A seller's market is where there is a high demand for the houses.  There may be low inventory of homes.  There may be more buyers looking than there are homes for sale.   You can't lowball offers in a seller's market.   Sometimes even 5% below list price may be considered a low offer in a seller's market.  So if you are one of those people that love to bargain or like to make your first offer low you may have a hard time.  In a seller's market you want to get the deal tied up as quick as possible so some other buyer does not come in with a better offer.  You do not want to lose the house because you took to long.

Looking for a deal in a seller's market is very hard.   I would say not having to pay over list, or paying over market value in a seller's market is a deal.  You may not think so, but it is.  It is more appropriate to say that it is hard enough to get a home offer accepted when it is a hot Metro Detroit sellers real estate market.  It doesn't matter if it is a Livonia home for sale, or a Berkley home for sale when it is a seller's real estate market you have to be quick.  You have to get out and see the homes as quick as possible.  So you either need to be searching on line by yourself or you need to have an automatic email set up so you receive home listings daily or as soon as they hit the market. Getting the home listings and the latest homes for sale daily is so important so you do not miss out on the deals.  Then once you have reviewed the Metro Detroit homes for sale daily you need to get out and see the homes that same day or within a day or two.  I have seen many homes sell in a day and many within the first week.  I pulled some quick sales last week in different cities around SE Michigan.  It was amazing to see that 30 to 50% of the homes sold in under 10 days in many of the cities.  So you have to act fast.

This whole article came up because I did an open house for a home in Farmington Hills and a young man came through.  He told me he was looking for a bargain.  He had been looking for over a year.  He was looking for a Metro Detroit home that was bargain priced.  He said it did not matter what city it was in, he wanted a bargain.  He wanted a below market price home and below what other homes had sold for.  Over the years I see  a few buyers like this.  Sadly to say many times they miss out on the market all together.  They never buying or end up buying years and years later.  They look and look but never find that good enough bargain.  If they had only bought in the beginning.  They lose sometimes so much of the appreciation they could have had.  They were so busy wanting that special deal.  So they miss out.  They have missed the market all together.  Most of the time they do not listen to their realors.  Many times they have gone through 3 or 4 real estate agents.  The agents quit working with them or the buyer fires them for not finding them that non existent bargain home.  Unfortunately their agent cannot force sellers to accept a low ball offer.

What many bargain hunters fail to realize is that there are at least a 100 or more real estate agents, flippers, and builders in the metro Detroit area that are scouring the MLS daily to find bargains and to find homes they could flip.   There maybe even 500  real estate agents alone doing this.   These guys are professional hunters.  They live it and breathe it.  They know the areas, the communities, and the markets.  They have the cash.  They have the smarts and know how to buy a home without a home inspection, or an appraisal.  They are a leg up on a bargain hunter.  You have to remember that some of these agents have deep pockets, sometimes representing millionaire investors.  So they are not buying one or two homes.  It's hundreds of homes over the course of the year.  So there is no way that most bargain hunters are going to beat or find a bargain home when there are so few to begin with.

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So where are the bargain homes in Southeastern Michigan?  Which homes may be the best deal for home buyers?  It definitely is not the nice beautiful homes that are updated and move in ready.  Most of those homes are going to sell at or above list price because they are so desirable.  Where a buyer may find a bargain is a home that needs work.  There is what I call a sweet spot for home buyers.  Sure some of the homes that flippers and investors are buying up before buyers get at them.  However there are some homes that if you put sweat equity in them they are a deal.  They aren't a deal to investors because they are paying somebody or some contractor to do all the work.  Michigan bargain homes are hard to find in a seller's market.  There are certain homes that there is not enough room for the flipper to make money, yet it is a deal for a home owner that is willing to do the work themselves.

Honestly you are getting a bargain if you can find a home a little below market price in a seller's market.  Talk to your agent and find out how hot the market is and how the house price compares to what is sold.  

Good Luck and may you find the deal you are Looking for....Russ Ravary your Metro Detroit realtor


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