Finding cheap houses for sale is both a skill and an art form – but you do not have to do it all yourself. Many people are taking advantage of the current environment of low prices to either jump into the real estate market for the first time, or to build and consolidate existing property holdings. The key to value is not always to buy houses cheap, but it can be a great way to get a foothold into the real estate market. These days a lot of cheap homes for sale are distressed properties (short sales, foreclosures, REOs and the like) – but there are still cheap houses to buy that don’t fit into that category.
Finding a house for sale cheap is not all about driving around looking for ‘house 4 sale’ signs on front lawns. You’re going to have to do better than that if you really want to grab yourself a bargain. If it was that easy to find real estate we would all be in cheap housing that we owned outright – or perhaps we would even have upgraded. But if it is a start you want, then you will have to get creative if you want to find houses for sale at the right price.
These are a popular way to source cheap properties, and basically involves the purchase of properties which the previous owners have not been able to keep due to the property being repossessed by the lending institutions. After repossession, the lender then sells the property to try and recoup some of the money they are owed after the loan was defaulted on.
Obviously these homes are cheap due to the misfortune of the current environment and the former owners – and for that reasons some investors are reluctant to purchase them. However to disregard these properties off hand just because they are foreclosure properties is not smart. Remember that someone else’s misfortune can be your gain, and that is the way the market works. However there are other ways to find a house for sale.
Real Estate Agents or private sale?
Many investors do not do business if it involves going through a real estate agent. I find that limiting, and will certainly result in missed opportunities. There are many properties listed with real estate agents that are cheap and provide excellent value. However if you limit yourself only to those properties which can be found under big ‘houses for sale’ signs, then you are doing your property search a disservice. Alternatively, the option of a private sale has also produced great results – and not just when you are looking for a cheap house for sale. This is largely due to not having to factor agent’s fees in the price.
Another benefit of a private sale is that the property will not be advertised as widely or through the usual means as if it were through an agent. This effectively reduces your competition for the properties that you find. Of course you will have to become a little more creative in your methods of finding properties, but that’s up to you. Personally, I find that two methods work very well – internet searches, and door knocking (both agents and of prospective properties).
A niche idea in a lot of areas which is growing in popularity is engaging a buyer’s agent to find suitable cheap houses for sale. In exchange for a commission, the agent will source properties that fit your specific criteria. If you are short on time, or just don’t want to do this yourself, then a buyer’s agent may be just what you need.
The thing to remember with cheap real estate is that the property is cheap for a reason. That may be due to the misfortunes of the previous owners, resulting in foreclosure. Alternatively, it may be that the property is in need of significant and costly repairs or upgrading in order to bring it up to standard. Whatever the reason, it is important to take your time with any real estate deal and ensure that you are aware of any extra costs that may be involved in the property after your purchase. Always remember too to look at recent housing sales in the area of the property you are considering buying, these can give you a reasonably good idea whether the housing for sale in the general area is declining in price – and if so, then avoid it unless there is a great reason for pursuing it – like excellent rental yield for example.