This was actually one of my favorite posts… and oddly, I wrote it around the time of our last Leap Year. However, it is possibly even MORE true now than it was then, back during the beginning of the crash, as things were unwinding. At that time, foreclosures hadn’t accelerated, banks weren’t too worried about getting their inventory through the system, and they were still thinking THEY were the ones in control of their market.
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There is a HUGE misconception among real estate consumers. Many want to connect “price”, like the asking price from the seller, and “value”. They feel that if they can buy a property for 10%, 30%, 80% (whatever) off of listing price, that they have a “great deal”. The problem is that there isn’t a magic number that makes a property a “deal”. As highlighted in the original post, the lower priced property in a subdivision, with the same floorplan and amenities, might not be as good of a deal as a higher priced property.
As I mentioned at the beginning, it may be more true now than it was four years ago. Then we were seeing some foreclosures, but they weren’t making up half of the market. They were on the fringe… Now, they are often the bulk of the sales. But more importantly, sellers have capitulated… And because of that, sellers knowing that they have to compete in the price arena with banks and short sales, they have priced for a fight. The bonus is that they are often homes that AREN’T loaded with the possibility of hidden issues. They haven’t been sitting vacant for months or years on end. They often don’t have a myriad of “deferred maintenance” issues (that’s real estate agent speak for “not able to keep up with the maintenance”).
Of course, that isn’t always the case… but the message is just as true now as it was then, pay close attention to the total cost, not just the price tag… or the discount on the price tag. Look at the value.
