By Chris Rowley
Everyone has a dream house in the back of their mind. It can be anything from a neat little 1,200 square foot cape with great insulation and an annual energy bill of under a thousand dollars, to some sprawling mansion of 8,000 square feet, with horse barn, paddocks, pool, and grand gardens. That's the dream, and those are rarely, if ever, a bargain.
Nope, bargains are not usually your dream house. And that means, if you're hunting for a bargain in the housing market, you have to be flexible. You have to be open to a variety of different kinds of houses. You also have to be prepared. Because there are other people out there who are also hunting for bargains.
"The first person through the door normally wins, when it comes to real bargains," says Dave Smith of R.J. Smith Realty in Pine Bush.
Cheryl Wolfe of Cheryl Wolfe Realty agrees.
"If you are looking for true bargains, well, they come and go overnight. Buyers need to be ready and realistic," she says.
So, when you get to that bargain property, as Smith points out, "you have to keep more of an open mind than a conventional buyer might. Most buyers say they need a certain configuration, but if you're bargain hunting you must think outside those parameters."
In other words, bargain hunters can't be too picky.
But the great thing about a bargain is feeling that warm glow inside, knowing that you got away with one, that you made out like a bandit, that you bought a house for many thousands of dollars less than it might have cost you.
Another nice thing about a bargain is that the upside potential is much higher than if you buy something at market rate. If you buy something at, say, 25 percent below market value, the odds are that you will see that home appreciate in value more quickly. So, a less than ideal home at 25 percent below market value will make you more money on resale than an ideal home that will be tight on the market price at the time of purchase.
So what do the real estate professionals advise when it comes to buying a bargain?
Karen Mills at CB/Currier & Lazier Realtors in Pine Bush suggests that the first thing you do is "be sure of what your 'needs' are versus your 'wants'. Make a list before you even look.
"Once you have those down, then take it a step further. Decide what issues are the deal breakers: school districts, yard size, age, square footage, basement, garage. Be absolutely certain what you 'can't live without' — and write it down!" she says.
At that point, as Dave Smith puts it, "You should get a real estate agent, a great agent, and work with that agent. This is a matter of building trust and a relationship. When people bounce around and call 20 different agents, it's actually counter-productive. What you want is that agent's attention. If you have committed to someone and they have committed to you, then you'll be the one to get first crack at any bargains."
And take note of those two vital words — "first" and "crack" — because the bargain game plays out in the first hours of the morning.
"A good agent who is hunting for a bargain will be up early searching new inventory and matching with their clients," says Smith. "That's when you get the call at 8 a.m."
The call goes something like this: "This looks incredible. It's — [fill in the blank] — and it only costs — [fill in the blank]. We need to be there by no later than nine."
At this point you have to have your ducks in a row. "Get your financing in order first," says Karen Armstrong. "The true bargains sell very quickly to the first buyer who is ready to purchase. That means being pre-approved for a mortgage with a lender that will close quickly. So, shop around the banks, and get several approvals. Each lender will offer a different package; just pick the one that's best for you."
The other really important tool in the bargain hunter's kitbag is having a good house inspector's phone number and talking to him or her before you head out into the territory. There can always be some really serious issues with a house, any house, that are not visible to you, the layperson, on casual inspection. Your inspector will get under the crawlspace, into the corners of the attic, and behind the oil tank in the basement — where those serious problems just might be lurking.
Of course, besides those basics, there are other things to consider, like the various reasons why a bargain comes onto the market and within your reach.
"Everyone thinks foreclosure means a bargain," says Dave Smith. "But very often the problems outweigh the bargain factors. You really have to do your homework, and, as I said, have an agent who does theirs."
Karen Mills notes that, "Any homes that are bank-owned, or 'corporate'-owned, are usually sold 'as-is.' That means it's absolutely necessary to have that reputable house inspector ready for your call."
The other reason for a lot of bargains is what is called an "estate sale," which often means someone has died, their relatives have to sell, and they want to do it quickly and easily. One way to achieve that end is to price it aggressively.
So, where are the bargains? Where should you look?
"They're everywhere, really," says Karen Mills. "Right now there are some good deals for investors in Ellenville. The village has a lot on the market at very low prices (compared to a year ago), and there are quite a few multi-family homes."
But bargains exist at every price range. Cheryl Wolfe mentions a couple of typical bargains.
"There's an eighteen-hundreds-farm house in Pine Bush, it has an income apartment, barns, beautiful grounds, a stream, and 6.8 acres. It can be subdivided into two lots and there is real potential. That's at $329,000 right now and I'd call it a bargain."
Wolfe points over to Phillipsport for another bargain opportunity. "This is an estate sale property with six dwellings, a beautiful main house and grounds. It's been assessed by the town at $600,000 but the family is selling for $400,000."
Karen Mills has some bargains too. "At the low end I have 1.15 acres of land in Wawarsing on Briggs Highway that's selling for $24,000. The taxes are only $184, so this is a great parcel for someone who doesn't have a lot of money and is looking to get started on building their own home.
"After they have purchased the land, and perhaps paid on the mortgage for a year or so, they may be able to afford to purchase a manufactured home, which is allowed on that lot, on a slab or foundation. That is a very affordable way to purchase your first home," Mills says.
At the other end of the market, Mills has a fabulous property. "This has 37 acres on Route 48 in Crawford, with an absolutely stunning 3,200 square foot home. At $569,900 this is the best bargain on the market right now for the higher-end shopper. This house is beyond beautiful; the property has a spectacular view of the ridge, plus a barn and fenced paddock areas. Plus, it also has the potential to split off several acres and sell the lot, which would effectively lower your actual investment."
Dave Smith has one too. "There's this sizeable house a little bit north of Spring Glen. Private kind of road, and a 2,400 square foot house for $175,000 in an estate sale. That's probably half the normal price and it just screams 'bargain' to me."
So, if you're hunting for a bargain, decide what you can afford. Then get your financing in order. Get friendly with a good agent and check out a tough, but fair, house inspector. Then go searching along the highways and byways of our beautiful region, from the Route 209 corridor in the west, to the Route 302 "viewshed" in the Town of Crawford, or beyond. Just be ready for that 8 a.m. call from your agent, and don't be surprised when he or she says, "You wouldn't believe what's shown up on the listing this morning. Can you meet me in 45 minutes?"
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