(By Tushar Mathur) No doubt that buying a home will likely be the largest purchase in your lifetime. You'll be laying out a lot of money upfront and through the life of the loan. Therefore, it's important to be aware of homes that may sell for less than their asking price. If you're willing to broaden your search and look past your initial impression of a home, you'll be able to identify these opportunities and score the best home for your money.
The vast majority of home buyers begin their shopping experience online, so let's analyze clues that a home may sell for less than its asking price.
Days on the Market: Homes priced at market value and in good condition will be listed and sold quickly – perhaps in a week or less. Your opportunity is to watch for stale listings. New buyers often assume there must be something wrong with these listings because they haven't sold in several weeks, perhaps even months. Homes that sit don't necessarily mean there is something wrong with them. They might need work or perhaps the location is not ideal. But that doesn't mean the home is not right for you. Look at days on market as a potential opportunity.
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Low Quality Online Marketing: Even though online photographs of a home are imperative to the selling process, some homes are still advertised with dark, blurry, unprofessional photos. This is a turnoff for most buyers, and they won't pursue beyond this first reaction. Try to disregard the quality of the photos and focus on the features of the home. Do you like the home's location, school district and layout? If so, schedule a showing. Less interest in a home results in fewer buyers and less-competitive pricing.
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Overpriced: Once you've been house hunting in a specific market for a while, you'll become more familiar with the range of home values and list prices. Establish what you can afford using a mortgage calculator, then schedule a showing even if you believe a home is overpriced. If the listing price is too high, the seller will not receive full-price offers, and the home will likely sit on the market for a couple of weeks before a price reduction. Use this opportunity to make an offer that you can afford.
INDICATORS AT AN OPEN HOUSE:
At an open house or showing, a separate set of clues identifies homes that may sell for less than asking price. Buyers are looking for a home they can immediately fall in love with. If a home doesn't show well, fewer buyers will be interested, increasing the likelihood of the seller accepting a low offer. Here are some things to look for.
Poor Staging: A buyer's first impression can be affected by a home the shows poorly. Whether it's oversized furniture, dark rooms, extreme clutter or a disheveled yard, these first impressions are big turnoffs. Even though these negative features are easy to correct, they can set a tone that a buyer cannot look past. Therefore, homes that are poorly staged are ideal opportunities to make a below-market offer.
Overly Personalized: Watch for homes that are cluttered with multiple family photos, awards, weapons, trophy animals or animal hides. Buyers like to visualize themselves in the home, and the sight of specific people or controversial objects will make the home less desirable.
Minor Home Improvements: Most buyers get distracted by small home improvement issues. Don't rule out a home just because you notice dingy carpet, a cracked window, bad wallpaper or an outdated mantel. None of those fixes will break the bank. Use minor flaws as negotiating tools for a reduced price.
In summary, keep these tips in mind as you search for a home that may sell for less than its market value. Try to focus on the permanent features of the home: the location, layout, square footage, school district and natural lighting. Imagine the home painted in a color you love, with bright lighting and curb appeal. Envision it filled with your family and belongings. If you can look beyond the distractions, you may score the home below its listing price.