How to Buy Well in Michigan
10 Ways to Buy Listed Homes Well in Any Market in Michigan
“The best time to buy a home is always five years ago.”
Why is it Important to Buy Well?
The real estate market does not always go up.
You make your money when you buy, so it is critical you do not overpay.
Real estate is considered an illiquid asset, so it can be difficult to sell if you did not buy well and the market changes.
You don’t want to be house poor and buy more house or have a house payment more than what you can comfortably afford.
What is a Listed Property?
A listed property is any property represented by a real estate professional and listed for sale on the MLS or Multiple Listing Service for residential property or LoopNet for commercial properties.
Why Listed Properties?
There are many reasons why buying listed properties makes sense:
Most properties for sale are listed.
Listed properties are easier to search and filter.
Listed properties are represented by real estate professionals bound by a code of ethics and other legal requirements.
What Are The Clues to a Good Value in a Listed Property in Any Market?
There are many clues to finding value in listed properties:
1. First is the quality of the pictures taken to present the property.
If the listing agent uses poor quality or limited photos, there may be value from an under marketed property that fewer buyers will be interested in putting in an offer.
2. Words like “as-is, deferred maintenance, handyman special and motivated seller” in the description.
These phrases tell you there may be value to add with fewer buyers willing to take on a project or a motivated seller presenting a good buying opportunity.
3. Look at the listing history.
It is informative to see if the property was on the market recently, taken off the market, and if the price was reduced in the new listing.
4. Of course, look at days on market.
This can tell you a lot especially in a seller’s market.
5. If there is a tenant in the property ending their lease, or are month to month it can be a clue to value.
It can present a good buying opportunity because most buyers are not interested in dealing with tenants.
6. Property details in the listing such as “bank owned and short sale.”
This can also be a clue to value when they are available on the market.
7. Words in the property description that suggest seller concessions.
Seller willing to help the buyer with their closing costs (usually capped), a redecorating allowance, or an area in need of upgrading, like flooring.
8. Incentives offered to agents to bring a buyer by seller.
Sometimes a seller will be willing to offer a cash bonus or higher commission on the sale if they bring a buyer. This can be a sign of potential value.
9. Seller financing can be a clue to value.
If the seller is willing to provided financing to the buyer in terms of a land contract or a seller held second that may be a sign of potential value.
10. Overgrown landscape around the house.
If a potential buyer cannot see the house well because of overgrown landscaping, it may reduce the number of interested buyers and decrease the value of the property.
How Can a Real Estate Professional Help You Buy Listed Properties Well in Any Market?
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They should know favorable or unfavorable information for the property like new investment in the area or flooding or failing basements in the area for example.
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For example, a seasoned property inspector to make sure you are buying well or if repairs are needed saving you money.
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It is imperative to be able to fund deals smoothly and quickly. It matters to the listing agent what kind of loan you are getting and who the lender is so they have confidence in your offer and ability to close as agreed.
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This can help you close deals with their accumulated competence and good will.
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They will know how to design an offer to reflect the current market and position your offer to be accepted by the listing agent and seller.
How To Buy Listed Properties Well in Any Market
Buying listed properties well in any market is an important skill because most properties are listed.
Listed properties leave clues to value like the quality of pictures, property descriptions with clues to deferred maintenance and the listing history.
Finally, because the properties are listed they are usually represented by a real estate professional bound by a code of ethics and your real estate professional should know value and how to add value to the transaction with their experience and accumulated expertise.
Arbor Advising has a passion for helping people buy, sell and invest in real estate. We believe real estate is the best way to create passive income, grow your wealth and provide inflation adjusted returns in retirement with fantastic tax benefits.
Want to learn more? Contact us.
Disclaimer:
Always speak to your CPA, investment advisor and attorney before making any investment decisions. Past performance does not guarantee future returns. Arbor Advising seeks to educate and does not endorse any specific product, service or investment.
