What does the word “deal” mean to you? When I think of a deal, it normally has to do with saving money on something. The problem with just examining the dollars involved in a transaction is that it can blind you to other important considerations that also need to be examined. Buying a home, for example, has many components that need to be considered other than just price.
Narrow down your criteria based on the main factors including property class, purchase price, location, condition, and financial return. Don’t sound like a rookie and simply say you want a “good deal” when you speak to a professional. After all, no one wants to sound like a newbie right? The word “deal” can be an extremely vague statement when used to describe the type of property you are looking for. Each one of us has a different definition for what the word means, and by simply stating you want a good “deal” you are not actually saying anything at all.
To come off as an intelligent investor, zero in on your specific criteria, but don’t be too specific as to not giving yourself and your Realtor some latitude in the property search. Understand that if you truly want to take advantage of the opportunities out there you’ll need to be flexible on the points where you can be. Although it is not a house you will ever be living in, it should still be a place you would feel comfortable living in yourself if you had to. That way, others will feel the same and you will attract a higher quality tenant.
In terms of location, is it near a major job market? Is it near good schools and convenient to shopping? All of these need to be factored into your decision making process. Let’s say you found a “deal” in a neighborhood that is not well maintained. You can do all the remodeling and painting you want, but you can’t single-handedly turn the neighborhood around. Even if you have to pay a bit more, it is better to find a house that would be considered the “dog” on the block and put your money into it. Rehabbing can get expensive, and sometimes buying a place that’s already in good condition may be the best “deal”, even if it costs you a bit more.
When you find something that meets most, or all of your criteria, be prepared to move fast. Others are probably looking at the same deal. Always leave yourself an out by writing your offer subject to approval of a professional home inspection report. And if possible, try to negotiate for the seller to pay for a 1 year home warranty. It’s a great piece of mind policy.