Looking for bargain properties is challenging, but one potential indicator that a seller might be getting anxious is the number of days the property has been on the market. Your local Multiple Listing Service has this information, abbreviated DOM for days on market. What you will not learn is why the property has not sold. To do that, you will need to inspect the property and do some research.
Know the Market Value of the Property
Before you jump in and make an offer, check recently sold comparable homes in the neighborhood to determine the property's value. Homes stay on the market for a reason, often because of price. Some are overpriced because the owner owes too much or the seller is ignorant of the current market. Owners who have added on or made excessive improvements to their property often try to recoup the cost of their handiwork.
Consider Other Reasons
You don't want to inherit other people's problems. A bad location, structural problems or upcoming changes in the neighborhood, such as new development, will cause homes to sit on the market. Issues you can't fix such as poor schools, crime, lack of shopping, transportation or amenities affect property value. You should know these factors before you make an offer. Ask yourself whether you will have difficulty selling the property later on if you inherit these issues.
Prosoing a Good Offer
If you have found a good property, fairly priced, but is simply being overlooked in the market, put together an offer. Do not assume a seller will jump at a low-ball offer because the property has been on the market for a long time. Instead, offer a slightly lower price with a seller concession, such as points toward your loan. You will achieve what you want, a lower net cost while conserving cash, without being as obvious.
Create an Offer that Makes Sense for You
Once you have done your homework, move quickly with your offer, especially if the price has recently been lowered. Even in a buyer's market, sellers do not want to give their home away, so be creative. If the seller has enough equity in the house, use that information to make an offer, such as a 10 percent, three-year owner financing, or ask the seller to provide down payment assistance through a nonprofit program, or negotiate a decorating or carpet allowance.