How to Find a Real Estate Bargain

Regardless of whether you’re a first time home buyer on a limited budget or a new investor looking for real estate opportunities, there are a few basic principles that might help you in your search for a real estate bargain.

The first is that the best bargains almost always get bought up before they hit the real estate listing services.  So while you might think the Internet is a good place to search for real estate bargains, it’s not the best source.

To find a true bargain you’re going to have to either find a highly experienced veteran real estate agent; or rely on your own ingenuity and effort.  Let’s step back a moment and consider the two drivers of a real estate bargain:


- Property Driven Bargains
- Owner Driven Bargains

Property Driven Bargains

If the property itself is in a state of disrepair, it might qualify as a true bargain.  The trick is to be able to tell whether or not the property is a “money pit” which will cost more to repair than you can realize in resale; or whether the property can be fixed up and still sold for a profit.  This determination varies depending on whether or not you are buying the home as a speculative investment or are planning to repair it and live in it.

If you are planning on living in the home for an extended period of time, the renovation costs can be spread over time; resulting in a true bargain.  

It takes a lot of experience to be able to assess the nature of the disrepair and the cost of renovation, but an example of an “ideal” property in disrepair might help.  Consider a home owned by an elderly cat loving couple on a fixed income.  

They had the money to repair the roof when it leaked, keep the gutters clean, and fix the leaks in their ancient plumbing fixtures; but no money for improvements.  While the landscaping is non-existent, excessive shrubbery and trees have been cut back from around the building, eliminating the dangers of excessive moisture at the foundations.

The picture we’re drawing here is of a house whose basic structure and systems have been preserved while the decorating and décor is dramatically old and out of date.  What really makes this home a great bargain candidate is the cats.  The ammonia smell from stale cat urine is enough to keep many potential buyers from entering the home for an inspection!  The result is that a wise buyer who is willing to clean the place up and update the fixtures and redecorate the house will end up with a real bargain house.

Owner Driven Bargains

There a variety of circumstances that force owners to sell a property for less than it is worth.  Generally speaking, the most common reason is the need for a quick sale.  Some owners that have bought new homes before selling their existing home are willing to sell for far less to avoid paying two mortgages.  

When the owners (or their heirs) of homes in disrepair or homes that need to be sold quickly get ready to sell they are more likely to go to an old established real estate firm in the area.  To get into the bargain real estate game, you have to establish a relationship with that kind of firm and with the most experienced agent within the firm who has been listing homes in the area for decades.  

With a little ingenuity and a lot of hard work you might be able to find bargain houses on your own.  Sometimes homeowners begin cleaning out a home before contacting a real estate agent and the evidence will be obvious in the alley or wherever trash awaits pickup.  Some real estate speculators have developed ongoing relationships with disposal companies that may be the first to know a homeowner is getting ready to move.

If you have the temperament for it, you can comb the neighborhoods where you would like to live or invest for homes with visible evidence of neglect.  Simply walk up and ring the doorbell and ask the owner if they are interested in selling.  Good luck finding your first real estate bargain!