Too frequently, people in the market for a
house will say, “I’m looking for a good deal.” What they really mean is
they want to pay below market for a property. For clarification, I’m
talking about people looking for a house in which to live, not
speculators or developers. A few of the more probable ways of
purchasing a property below market are as follows:
- Finding an older person with dementia and talking him in to selling his property for a ridiculously low price before anyone who cares about his best interest steps in and prevents him from being cheated out of the property.
- Giving someone with a nice house in a nice neighborhood a predatory loan and then foreclosing on their property.
- Marrying someone who already owns a house and having the person add you on to his/her deed.
Of
course two of the above mentioned scenarios are immoral if not illegal
but the point is this. A good deal is a good house in which you want to
live, purchased at fair market value. If the house can be had for a
ridiculously low price, there’s a reason for it. There are too many
people looking for houses for a person to be able to sneak in a low-ball
offer on a property worth more.
I
can’t tell you the number of times clients have lost great houses they
have wanted to purchase, because they had to have a “good deal.” There
may have been multiple offers on the property and after losing it, the
client would say, “they paid too much.” Well guess what. If there were
multiple offers and the price escalated higher than asking, the
escalated price is fair market. I would rather have a house at a price
in which many people wanted to purchase it, than a house that’s been on
the market for 180 days for 5% less than asking. At least I know the
house with multiple offers is desirable and will command a good price,
if and when I want to sell it.
When
buying a house, condo or coop, a “good deal” is a property in which you
would love living, in a neighborhood where you want to be, at fair
market value. It’s easy to get a “bad deal.” The surest way is to focus
on how much you pay rather than focusing on where you want to live.
Figure out your budget and within that budget, focus on nothing but the
house and location. Everything else will take care of itself.
