If the old cocktail party conversation was about how much your house had gone up in value, the new one could be – what a great 55+ bargain you found in this distressed market. Home prices are down, big-time, in most markets. Smart buyers are out there now looking for the best deals. This article will talk about possible strategies that you might follow to buy a house at a bargain price – and without getting burned in the process. Our emphasis is on the “nearly new”, homes that are 1 or more years old.
There are several ways to buy your retirement home, whether it is in an active adult community, a 55+ development, or in a mixed generation town:
1. From the development sales office. Generally this means you are buying a brand new home, perhaps one that hasn’t even been built yet. You will probably pay the highest price, but you also get the best guarantee – and a new home.
2. From the existing owner. You might get a very good deal, but you also carry plenty of risk and no guarantees. Extra due diligence is called for without any professionals involved in the transaction.
3. From a real estate agent. There are many advantages. Although you will probably pay a little more, that could easily be more than made up because of the broad selection of properties you are shown, their experience, and their market expertise.
4. At foreclosure. Perhaps the biggest bargain opportunity, along with the highest risks. You are buying as is – if you buy a lemon you better be prepared to open up a lemonade stand. You can buy foreclosures from banks, agents, or even at auction.
5. Short sales. In this type of sale the home is in danger of being foreclosed, and is worth less than the mortgage. You might get a good deal by buying before it is foreclosed on, but you must be patient and persistent. Most short sale deals fall through because the banks or servicing agents don’t agree to the terms.
Existing homes often the best bargains.
There are several advantages to buying an existing home rather than a brand new one:
– The house is broken in, obvious defects have been repaired
– Additional amenities and improvements have been added
– The owner wants to sell fast and willing to negotiate. You will probably pay less
– The developer’s price chart is out the window
– The neighborhood is built out; you can tell what it’s really like, and promised amenities are either there or not
Buying from the developer also has advantages:
– You will normally get a strong guarantee
– You get to design the final stages of the house, choosing exactly the features and design you want
– Some people like living in a brand new home where
no one else has ever lived
Finding the bargains out there
Our good friend and Topretirements member OldNassau had some wonderful suggestions for finding the bargains out there. Here they are:
1. Copy the name (e.g. “Ashton Lakes”)
paste, with ” ” and the state or nearby city, into Google searchbar.
Either specific homes or local real estate agents will pop up.
Browse through these listings and you will find a lot of possibilities
I have found that resales are not only often cheaper than the same model, new, but have owner-added amenities.
2. For real bargains and the best buys in active adult communities, go to Trulia.com. Type in the community and/or city and you will see all kinds of ways to search for properties: You can select various price reductions (10%; 10 – 20%; 20+%). You can even specify $/sq.ft, or type of sale (bank, foreclosure, owner…). Usually these search options are displayed clearly, but Advanced Search also brings them up. You can get other really helpful information at AOL Real Estate – including the markets with the most sales, the best value, the most foreclosures, etc.
3. Another suggestion: after the development name, type “lawsuits”. Or “HOA”. There are many possibilities.
Point is: don’t depend on the in-house panegyrics. Use all the tools and you should be able to find your dream retirement community – at a great price. Good luck!
For further reference:
“Mint Condition, Low Miles” (NY Times)
What do you think? Please post your opinion in the Comments section below. And be sure to see additional thoughts from Old Nassau on the same topic!