Real estate prices are rising, but it’s still possible to find deals even in a red-hot housing market.
Buying a home has become incredibly difficult because most of the country has become a seller’s market.
Sale prices have escalated, pricing some people out of the market and pushing others to spending more than they wanted to.
It’s a bleak situation for anyone buying a home and it’s a market that has trapped people who might be willing to sell because they don’t see anyplace they might be able to move to.
There are, however, some ways to find a (relative) bargain even in a time of higher prices and very limited inventory.
To do that, you need to be prepared flexible, and perhaps a little daring.
These steps won’t guarantee that you find the house of your dreams — or even the house for right now — but they give you a much better chance.
1. Have a Great Realtor
Early in the pandemic, my wife and I sold our downtown West Palm Beach condo, bought a Disney-area resort property with some of the proceeds, and moved into a larger rental a few miles from downtown.
We needed to stay in roughly the same area so my son could finish high school, which he did this May.
Renting was not a long-term plan for us and with six months on our lease, slightly ahead of graduation we contacted our long-time Realtor.
Having worked with the same person on multiple transaction, we had a high level of trust and she generally knows what we would do without us having to convey it.
You can’t build that trust quickly — we had bought and sold two properties and purchased our resort property with this Realtor — but you should find a buyer’s agent you feel comfortable with overall.
Ideally, look for someone willing to communicate, who responds quickly, and is willing to listen to what you want.
2. Have Your Finances in Order
We lined up a real mortgage pre-approval before we started looking.
I talked to potential lenders as I had only been in a full-time job for under a year after a decade of freelancing.
That’s a complicated mortgage approval to get, so we made sure to clear most of the hurdles and find out exactly what we could afford before we began looking.
In addition, we took some small steps to make us more attractive to the lender.
That included paying off a small car loan, making sure to keep our credit card balances paid off, and making sure we had no large expenditures.
We also gathered paperwork to show where funds from some non-payroll income we had came from and we sold a small property.
3. Look at a Lot of Houses and Be Flexible
We wanted a single-family home after years of living in condos and townhouses.
It became obvious pretty much immediately that we could not afford anything suitable anywhere in Palm Beach County, so we began looking at condos/townhouses.
Most properties we saw checked most of our boxes, but lacked the amenities I wanted — resort-style pool and a gym — and were in areas that were less desirable.
With no kid in school, we had a lot of flexibility, so I opened up our search to see if we could afford a single-family home that met our needs anywhere in South or even Central Florida.
We found that the Orlando-area had a lot of choices, but since we owned a property there anyway, moving there would require selling that condo, and buying a small place in South Florida.
That was more moves than I wanted to make.
That led us to Port St. Lucie, or more specifically, the Tradition section of Port St. Lucie, which is sort of a town within a city.
Tradition had a very small amount of three-bedroom homes in our price range in developments that offered the amenities we —really I — wanted.
Moving to Port St. Lucie meant sacrificing location.
We’ll be about 40 minutes farther from family and less convenient to airports, but we could in theory afford a single-family home on a nice plot of land in a development with a pool, gym, walking trails, and a clubhouse.
4. Take on a Problem House
When we opened up our search to looking in Tradition/Port St. Lucie exactly three houses were available in our price range, all in the same complex.
One only had two bedrooms and we need three, but the other two seemed like prospects so we went to look at them.
The second house we saw was a mess and it needed a total redo.
The owner had also recently lowered the asking price, so we immediately decided to put in an offer.
Our agent called their agent and we made an offer slightly under asking.
As communication continued over the next few days, we upped our offer a few times until finally, after we had thought we had a deal, they told us they had accepted a cash offer from someone else.
As that was happening — literally while I was on the phone with my Realtor — another house in that complex became available at a lower asking price.
There were very few pictures and a tenant was living there who had the right to stay for 90 days after being given notice of a pending sale.
My agent hardly needed to ask if we were going to make a sight-unseen offer.
We did exactly that knowing that it could not be in worse shape than the previous home we had bid on.
Our bid was over-asking and we priced it relative to the previous house.
It was accepted and we were able to meet the sellers’ demand of a 30-day closing because we had already prepped our mortgage.
When we started the home-buying process purchasing a fixer-upper 40 minutes away from our chosen area was not even a vague consideration.
But once we saw the reality of the market, we made the choice to sacrifice location and being move-in ready over sacrificing buying a single-family home.
To buy a house or a condo in the market, most people will have to make sacrifices, but ultimately we got a house, that with a lot of work, we will be happy living in.
In addition, we stayed at the low-end of our budget and maintained the flexibility needed to be able to make the house the home we want.