This is my column for this week from the Arizona Republic (permanent link):
Choosing second-best could get you the best possible home
Last week we talked about how, even with so many unsold properties, multiple buyers can somehow land simultaneously on the one property on the market that approaches perfection.
This is perfectly natural human behavior, if you think about it. Who hasn’t thumped a melon? Who hasn’t reached into the back of the cooler for the fresher milk? Who buys the brown ground beef when there’s redder meat available. We were not just born to shop, we will perish if we don’t learn to shop wisely and well.
It’s no different for houses. You have a certain amount of money available, and a certain selection available to you for that money. It’s completely natural that you would shop until you find the home that is far and away better than your other choices.
And it’s perfectly natural that other buyers would come to the same evaluation of the available inventory. They wold have bought the same melon as you, except you got there first.
But there’s still an important difference. A good melon is as good as it’s going to get, and a bad melon cannot get better. But a house can almost always be improved.
Here’s a melon-improvement strategy for financially-savvy home shoppers.
That home you fell in love with is almost certainly a production home — a tract home. Yes, it’s in great shape, and it’s staged to perfection. But guess what? There are three more almost exactly like it for sale on the same street. They’re not as clean, not as nicely-decorated, not as well-marketed — but that works to your advantage.
The difference between your dream home and what looks to you like a bad melon is really just a matter of money. If you put that money into the bad melon, it will be as good or better than your dream home.
So, rather than competing for the best house and paying top dollar, you can use it as leverage to get a lower price and seller concessions on a home that could be even more ideal for you — after you do a little work.
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Ron the Foreclosure Expert says:
Even if a buyer has a phobia about paint brushes, drills, or hammers, they can still “write a check” to a contractor and come out way ahead. As an extreme example of this idea, there are always some foreclosure opportunities:
http://www.foreclosureexpert.info/real_life_foreclosure_examples/index.html
February 14, 2008 — 2:31 pm