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Last Updated: Jul 2nd, 2008 - 21:15:22 |
(NUI) - Real estate prices have risen dramatically nationwide, with homes commanding pretty hefty prices.
Think there's no way around it? Think again. With a little bit of industry knowledge, homebuyers and investors alike can save tens of thousands of dollars on the purchase of their next property.
Here's how:
* Only buy from a motivated seller. "It sounds like a wonderful property. Why would you ever consider selling it?" It's the single most important question to ask a seller. If the seller has no compelling reason to sell, it's best to move on.
* Create competition when you're buying. Try subtly introducing competition into property negotiations. For example: "I'm getting all the houses I've seen today mixed up. Can you please remind me a little about your property?" Appropriately dropping hints of other homes can tap into a seller's fear of losing a potential buyer.
* Understand the power of qualified cash buyers. In home buying, getting a solid, pre-approved loan is a lot like receiving a college diploma: Both credentials can ease your way to fulfilling a main objective. In this case, the goal isn't a career but home ownership.
As a pre-approved cash buyer, you are financially able to close quickly and easily, should you purchase the seller's property, making you a more appealing buyer. Your pre-approval carries even more weight with sellers if they've had deals collapse due to loan contingencies.
* Master the art of negotiation. Negotiation is essential when it comes to saving money on your next house. Start by asking the seller what he or she deems as the right asking price. Follow up by asking what the seller realistically expected to get.
Or, try the range technique, one of the simplest ways to gently test a seller's limits:
Potential buyer: "What did you conservatively expect to get for the property?"
Seller: "$250,000"
Potential buyer: "Really? You expected to get between $240,000 and $250,000."
If the seller argues, simply shrink your range until you find out how low the seller is willing to go.
* Always bid on two or more houses at the same time. Let the seller know you'll do business with the first to accept your offer. If anything, it helps give you leverage. Remember, the fear of losing a buyer makes for a more flexible seller.
David Finkel is co-author of the Wall Street Journal best seller "Making Big Money Investing in Foreclosures Without Cash or Credit." He also is a full-time real estate investor and the host of the nationally broadcast Real Estate Radio. His Web site, www.freeinvestortools.com, is ranked as one of the top 10 investor sites on the Web by the American Real Estate Investors Association.
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