The strategy of home buying includes using the right tools to make an offer, but which home you select is also critical to your success.
Strategy #1 FUNK
In my experience, most home buyers want the flashy home that has recently been renovated or that appears to be in excellent condition. Homes with new flooring, new appliances, and fresh paint get all the attention. You will pay a premium for the flashy home with all the fluff for obvious reasons. The actual cost of floors, appliances, and paint is not that great. Find a home that needs these items, pay less, win the house, and make the upgrades yourself. A home with outdated decor is a great way to go. You can also take it one step further. I love a home for sale that is cluttered, has funky wall colors, and possibly even a bad odor. I know I can win it for my buyers and help them turn it into a great buy. Think of the funk as money in your pocket. You are going to take out the stinky old carpet and paint anyway.
If you don’t have the imagination for this and simply cannot visualize the improvements, use logic. Focus on the location of the home, the architecture, number of bedrooms, square footage, and other considerations on your wish list. Write the pros of a home that looks bad on paper and see them as facts vs fluff. Do not fall for new appliances and other shiny objects. Most of the time they are the cheapest on the market and will last six years if you’re lucky. Be prepared to buy your own new appliances, paint the house the colors of your choice, and redo the floors exactly how you want them.
If you don’t have the cash, get the sellers to pay more of the closing costs by offering to pay that same amount more for the home. Now you keep your cash to fix up the house and you will be paying only a few dollars more on the mortgage each month or more likely, less because you are paying less for the house. You can also open low-interest credit at your box store and pay it off with the monthly savings on a less costly home.
Strategy #2 Days On Market
Look for homes that have been on the market for a while. Days on market, DOM, can tell you a lot. Sometimes it is a perfectly good home that started overpriced. Overpricing a home turns it into a leper. Even if the price is reduced it stops getting any attention. Don’t follow the herd, go look at these homes that have been sitting a while. If it is still overpriced, make a fair-market offer. If the sellers have already rejected fair-market, they just might be getting the message and accept your offer. If not, go on to the next house.
Strategy #3 POOR MARKETING
Another reason a home can be on the market for too long is poor marketing. An agent takes the listing then does a lousy job on the write-up and really blows the photos. They put one or two iPhone snaps in the MLS or they put lots of lousy iPhone photos in the MLS. They seem to take photos of furniture or a light switch and generally don’t show what the house looks like. Everyone passes on the house. If it meets your price and location go see it. Don’t rely on the marketing. We have all purchased well-marketed products that were disappointing, the reverse is also true.
Strategy #4 CAN’T GET IN TO SEE IT
Some houses are just tough to get into. Either the owners or tenants make it hard to see the house. Jump through their silly hoops and go see the home. It is a small effort for a big pay-off. They will have less traffic and interest in their home.
Talk to your agent about the four tools to help your chances of winning the bid, but don’t forget to love funk. If you can bring yourself to see a home for what it could be and not what it is today, you can buy a home and end up sitting on equity from day one. Don’t follow the crowd, there are great homes sitting in no man's land because of poor marketing, silly showing barriers, odors, weird paint color, clutter, outdated decor, over-pricing, and any number of other objections to the sale.