Advice on buying a house WITHOUT paying retail - Posted by Daniel Lane

Posted by Jerry Martin on September 21, 2002 at 14:54:43:

Daniel you need a little knowlege before you start so I would suggest you get one of the courses you will find on this site. I personally bought the Carleton Sheets course and have done well using his methods. Once you get a course and learn what you are doing I would suggest you go out and look for FSBOs and talk to some of the owners and solve their problems and yours.

Advice on buying a house WITHOUT paying retail - Posted by Daniel Lane

Posted by Daniel Lane on September 21, 2002 at 14:28:56:

Hello all,

My wife and I are looking to move up to a larger house in our area. We have two kids, a third on the way, and eventually might end up with four. So we need a 4 or 5 bedroom house, ideally with 2 living areas and/or a basement, and located in a good area/good school district. So we are looking to spend no more than $100,000, as we live in a fairly low priced area. In fact, the average sale price of existing houses is right at 100 g’s.

So aside from HUD and VA foreclosures, what is the best way to look for the best bargain on the largest possible house for my family and I? I am open to any radical or non-conservative ideas from the experienced folks here as long as they can work!

Thanks for any feedback.


Re: Advice on buying a house WITHOUT paying retail - Posted by Space Available

Posted by Space Available on September 21, 2002 at 20:39:03:

We’ve had some success by targeting a particular neighborhood with personal hand addressed letters that say you are interested in buying in that area and for prospective home sellers to call you before they list with a real estate agent (emphasize that you are NOT an agent). In fact, to keep mailing costs down, you can send to every other house and simply ask them to pass your letter to a neighbor if they’re not interested.

The idea is that once they call and you determine that the house is suitable, demonstrate to them that, if they list with an agent, their home will most likely sell at some percentage below list price. You might get the exact percentages from MLS statistics if you know any agents. We quote statistics that say homes are selleng at 92% to 96% of list. We use a 6% discount as a guide.

We then show that a real estate company will collect another 5% - 7% in a commission. Again we use 6% as a guideline.

Therefore if they list with an agent they can reasonably expect to walk away from a closing with anywhere from 85% to 91% of what the home lists for. If they are considering listing their home with an agent, your offer to buy - at what would be the same “walking away” money - should look good also.

They won’t have to market their home or maybe wait 60-120 days for another buyer to show up.

Re: Advice on buying a house WITHOUT paying retail - Posted by Tim Fierro (Tacoma, WA)

Posted by Tim Fierro (Tacoma, WA) on September 21, 2002 at 16:04:14:

Put an ad in your local thrifty nickel or similar:

! ! House Wanted ! !
3 Kids, and another one
planned; we need a
Large 4/5 Bedroom Home

We have $90,000 to buy
our new home, do you
have one to sell?
Call xxx-xxx-xxxx

Ask your title company for a list of homeowners who have 4/5 bedroom homes with bath and square footage you would like; and who have been in their home for over 4 years. Might round this off to a dollar limit but you did say the average was $100k so you could limit the list to houses that are under $100k purchase price and or tax value if there is any relation to values for your area. Then send them all a post card with the ad, maybe expand a little with the extra space. A followup could be done after a month or so with STILL LOOKING as the message.

You can adjust the numbers to what you feel comfortable with. The goal here is to find a seller who wants to sell in your price range. Then if the home is really worth $100k, they know you are only going to be able to spend $90k. Then you can negotiate further based on whatever. Tell the seller that you really wanted bigger bedrooms, larger living rooms, larger yard, etc… to get a price you are comfortable with. Then negotiate further with closing costs and dates that work out for your move.

Just some ideas to think about and it will be determined by your budget and time constraints.