Spotting and Buying Bargain Properties During a Recession

In a market where real estate prices are getting lower everywhere, how do you identify a real bargain?

Seller Is Motivated

Seller motivation, or “panic selling” is usually the best hallmark of a bargain property during a recession. The more anxious a seller is to unload the property, the more flexible he will be. The flip side to this is that the seller may be motivated to unload the property due to a problem of some kind, so be twice as careful to inspect such a property thoroughly prior to purchasing it, preferably assisted by an expert Realtor or a consultant.

Wait Until the Frost Sets In

If a property has been on the market for several months, waiting an extra few months until the winter comes won’t hurt. Sellers will be less likely to fight a lower offer in the winter due to stress from both the season and the carrying costs incurred.

Check Price Against The New Market Conditions

The knee-jerk reaction when a buyer sees a property for sale at less than its market value would have been a year ago is to buy it. Make sure that it is still a bargain by doing your homework. Check what similar properties have sold for in the last few months in the same area. This will tell you if the property is actually a bargain or if the price is just reflective of the current market climate.

The Dirtier the Better

If a building isn’t clean, many buyers will be turned off. Watch out for properties that are simply not clean, or only need cosmetic work, but don’t require major renovations. If you don’t have time to do the work yourself, there are lots of companies that will come in and clean it up for you for less than you might think.

It is important to keep a level head when dealing with any financial transaction in the middle of a recession. Investors buy when they feel a property is a bargain; a savvy investor will do his or her homework first.