Buying a home? Overwhelmed by how expensive it is? I was too! But, I’m happy to announce my husband and I recently bought our dream home AND scored a huge discount on it. Relative to comparable houses sold nearby, we’re making out like bandits! This is despite several market challenges faced by homeowners today, including high prices, low inventory, and high mortgage rates.
The problem: these market conditions are expected to persist for the foreseeable future.
Plus, any good, disciplined investor knows timing the market isn’t a viable long-term strategy. Hence, I don’t recommend trying to “wait it out”.
In this article I’m dishing out our secrets that helped us save tens of thousands of dollars on our dream home in this competitive market and how you can employ these same simple strategies!
Tip #1 for Finding Your Dream Home:
Look in the Winter, Specifically Between Thanksgiving and Christmas
Ok, so I know I said not to time the market…and I want to emphasize this point!! If you see a good deal, don’t wait to act because you could be out of luck. What you’re looking for is value, and you may find that in the spring, summer, fall, or winter of this year, next year, or 10 years from now!
But real estate tends to be cyclical, meaning your purchase price could be impacted by the time of year. Think about it: people typically don’t want to move in the dead of winter, while kids are in the middle of a school year.
Given the size of the house we purchased and the fact that it’s located in a top-rated school district, the typical buyer probably should have been an established couple with kids. However, because our home was listed for sale in November, this demographic of buyers likely wasn’t even looking! Plus, sandwiched between Thanksgiving and Christmas, potential buyers might not have made it out to see the property if tied up with holiday festivities.
Because of this, I believe winter is the ideal time to score big deals on properties. However, buying in the winter may also be a double-edged sword: there may be less homes to choose from as sellers may wait to list until the spring when there is more buying activity.
Tip #2 for Finding Your Dream Home:
Look for Unfinished Basements and Attics
Before getting too far into the home-buying process, my husband and I knew we wanted a large home with room to start a family. That said, we decided we wanted a home with at least 3,000 square feet. So, we initially filtered for houses with 3,000+ square feet. DO NOT DO THIS!!! I cannot stress this enough.
The home we ended up purchasing is listed at just under 3,000 square feet. We believe it wasn’t even seen by other buyers in our price range (likely also seeking similar large square footage) because it fell between the cracks of the filters. There’s little doubt in my mind that if more people had seen it, it might’ve been scooped up sooner and for a lot more money than what we ultimately paid.
Although it was just under the square footage we initially sought, the basement was not included in the square footage because it wasn’t 100% completed! Our realtor estimated it would cost about $50,000 to finish it off and would drastically increase the value of the home, adding over 1,000 square feet of additional living space. If we were to buy a home with that extra square footage already in place, we would have spent far more than $50,000.
I strongly recommend buying a place with an unfinished basement or attic: you can easily add square footage later on and in many cases, for cheaper than it would cost to outright purchase a home with the already-completed space.
Tip #3 for Finding Your Dream Home:
Be Open to Seeing Properties with Higher Asking Prices
Admittedly, this is the most controversial tip I’m sharing. Many realtors hesitate to show home buyers properties that are asking above their price range out of fear they fall in love with it, but won’t ultimately be able to afford it.
But asking price is just that. Asking. There’s always a chance that you can negotiate a lower price, especially if a property has been on the market for a long time with no offers.
This happened to be the case with the house my husband and I purchased. It was at the very top end of our price range and I was hesitant to even look at it because of that. But we did nonetheless. And we saw tremendous value, even at asking price.
Luckily, our realtor worked his magic and we got the house for significantly less than asking. This just goes to show it never hurts to look at a property that’s a wee bit more expensive than you’re comfortable spending and try negotiating a lower price. Especially because the higher the price, the less people will be able to afford (and likely want to even look at it), the less people you’re competing with when submitting an offer.
Tip #4 for Finding Your Dream Home:
Be Open to Projects and Buy Potential
As much as I say we bought our dream home, the property we bought isn’t truly our dream home. Yet.
Although the house is in *mostly* good shape, there’s a lot of projects. Some are necessary, like adding gutters, replacing the bulkhead door, installing a radon fan, etc. Others are preferential style/comfort improvements. These include moving the laundry area, adding a “true” master bathroom, redoing the kitchen, and adding HVAC.
Sure it sounds like a lot. And it is!! But that’s what scared away other buyers and let us purchase this home for a steal (or at least a fair price, which is a steal nowadays).
Obviously, we knew when we first saw it it would need work. Needless to say we “bought potential”. The layout was super functional and gives us plenty of space we need to make our desired updates. And a house’s layout is something that would not be easy to change. Meanwhile, the projects we want to do seem incredibly doable (TBD on this!). Overall though, buying a house that requires some work allowed us to nab a great deal.
Tip #5 for Finding Your Dream Home:
Understand the Seller's Motivation
One of the best things you can do to score a deal on your dream home is learn about the seller’s motivation: why are they selling the house?
This, of course, is where a realtor really comes into play.
Before my husband and I landed on our dream home, we found another house we loved. As such, we put an offer in on it for what we believed to be a very fair price. The sellers had lived in the home for 20+ years and were moving to Florida, but because they had lived there for so long and had a deep emotional attachment for it, they weren’t willing to let it go for asking price. Yes, as it turns out, the asking price published online wasn’t truly the asking price! Instead, they were fool-hardedly thinking there’d be a bidding war on it. But with no other offers after 2+ months, they ended up pulling it off the market and are planning to list it again in the spring in the hopes of attracting a buyer willing to pay the desired premium.
On the other hand, the house we did buy was in a trust, once owned by an older gentleman who passed away. The trustee, while of course still wanting to get the most for the house, did not have the deep-seated emotional attachment as the other seller. Hence, he was willing to part with it for a much more reasonable sum of money.
Tip #6 for Finding Your Dream Home:
Take Away the Emotions
My last and final tip to scoring a great deal on your dream home is this: don’t think of any house as your dream home.
This might sound counterintuitive. And I recognize that. After all, a big part of the home-buying process is envisioning yourself in the space. But in doing so, you’re more likely to fall in love with a specific house and overpay for it.
I almost fell into this trap with the first house we put an offer on. I 100% saw us living there and building our lives there, so when the seller countered with a higher number, I was tempted to agree to it. However, my husband pointed out we’d be overpaying if we went higher. So, we withdrew our offer.
Boy am I glad we did! We’re now able to get our true dream home for a great price. And I can call it that now that the offer’s been accepted. 😉
Go Forth and Find that Dream House!
To recap, my tips for scoring a deal on your dream home in a competitive market are as follows:
- Look to buy in the winter months
- Look for houses with unfinished spaces, such as basements or attics
- Consider properties with higher price points
- Be open to projects
- Understand the seller’s motivation
- Don’t allow emotion to cloud your judgement
I hope you found this article helpful! If you liked this, please make sure to share it with a friend!
P.S. I’ll be sharing my home renovation journey on the blog, so stay tuned! If you’re not already receiving notifications of new blog posts, join TCC Club today by filling out the form at the bottom of this page and get alerts and special content (from me!) sent directly to your inbox.
Thanks for reading! Until next time, friends!
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