“I’m looking for a good deal.”
It’s a familiar refrain these days in the Phoenix real estate market. Where some believe the slowdown in the market is but the tip of the iceberg, there are many investors who see opportunity among the falling prices.
Recently I’ve been running searches for pre-foreclosure and short sale properties, as this is where many investors are focusing their energies. And with good reason, provided you are puchasing with cash and not financing and provided you are willing to deal with banks who may not provide confirmation of offer acceptance for weeks, if not months.
While pre-foreclosures and short sales (as well as bank-owned properties) provide the most obvious signs of a possible deal to be had, they aren’t the only options. In fact, the local MLS is filled with possible hidden bargains – if an investor (and his or her agent, if he’s working with one) is willing to look and willing to work and negotiate.
I’m often asked how far below list price and initial offer should be made. Truth be told, there’s no rule of thumb in a market such as this. For every offer that will be met with scorn (if not tears) by a seller, another may be expected by someone truly motivated to sell their property.
In Westbrook Village, there recently was a casita for sale at $120,000. I had an investor who was interested but who didn’t pull the trigger on writing an offer until two hours after the property went under contract. The final sales price – $105,000, a bit lower than my investor was willing to pay.
The next-lowest priced casitas in Westbrook Village are priced in the high $150s. Is one of these properties going to be available for $105,000? I highly doubt it – the above casita was a handyman special and the seller was particularly motivated.
But can one be purchased for $140,000? For $135,000? For even less? How much instant equity can be had at this point?
It’s a cliche, but it’s true. There’s only one way to find out. Make an offer and try to create your own deal.[tags]Phoenix real estate, real estate negotiations[/tags]