In today’s market, the play of the day is finding a real estate bargain. You can’t walk out your front door without hearing about Foreclosures, Short Sales or any number of distressed properties. Most of this is coming from people trying to sell you their “special” list of properties.

Louisville is no different than any other city in the U.S. except that we don’t have nearly the number of these homes as do places like Las Vegas, California and Florida. (I’ve linked to this before, but I love colored maps. Here’s MSN’s Interactive Foreclosure Map.) But that doesn’t mean Louisville has no bargain buys. So for that reason, I’ve written Top 10 Ways to Find a Louisville Real Estate Bargain.

10. Above Normal Appreciation

What if you can’t purchase a home below it’s current market value but… can purchase a home that will appreciate at a faster rate than everyone else once you own it? Then that’s a deal too! Like any task that includes predicting the future, this is a tough job. Having a wealth of experience and a long-term view can make this possible but it’s often easier said than done.

9. Property Infringement

There are times when the government comes in and requires a property owner to sell a portion of their land via eminent domain. Usually this is for a road, highway or airport expansion of some sort. These sellers are anxious to sell before the work crews come and buyers can usually get quite a bargain. Just remember to do all of your due diligence beforehand, so that you fully understand the extent of the government work and are happy with that outcome before purchasing one of these homes.

8. City to City

Most people do not have the luxury to choose where they live due to job requirements. But if you are one of the lucky ones, selecting a city with great bang for your buck home prices, then you can land yourself a real estate bargain. Louisville didn’t make MSN’s 2008 MSN Real Estate best bargain markets but for years, Louisville home values have been very attractive compared to the rest of the country.

Back in December I posted Louisville Weathers the Housing Crunch; Beats Cincinnati, Indianapolis where only Nashville and Knoxville beat Louisville when comparing similar sized cities in our region. That means Louisville home values are better than Cincinnati, Evansville, Columbus, Indianapolis and Memphis.

7. Looking Ahead

In every city there are hot spots. Certain neighborhoods are more desirable than others. This changes over time, but a good Realtor® with experience can tell you which areas are currently drawing the most interest. For example, here in Louisville, the Highlands extremely popular with younger home buyers. If you’re looking to find a real estate bargain, do not purchase a home in this area, you won’t get a deal. Instead, you’ll likely overpay.

But a wise shopper will look at the surrounding neighborhoods to see where the hot trend might spread once everything has bought up in the first area. Frankfort Avenue and Clifton are neighborhoods near the Highlands. They both carry many of the same character traits and prices haven’t yet spiked for these areas like they have for the Highlands. These areas are good bets for finding yourself a real estate bargain.

6. Uniformed Sellers

For the most part, For Sale by Owners (FSBO) properties don’t meet with much success. I wrote a piece called Top 10 Things to Consider When Contemplating a FSBO that highlights some of the difficulties that FSBO’s encounter.

Every good Realtor® will tell you that the most important thing in selling a home is setting the proper asking price at the start. FSBO’s usually don’t accomplish this task. Usually they’ll overprice it, which only hurts their chances with the smaller number of people who’ll see their home. But every once in awhile, they’ll under price their home. That’s where a bargain can be found for the astute buyer.

5. Auction Properties

Going to a real estate auction might seem a bit strange to many, but there deals to be had if you’ve done your homework. Generally speaking, these properties have some kind of problem that kept them from being sold in the traditional manner. Wardlow Auctions does a good number of auctions here in town, as does ReMax 100.

4. Non-Trendy Styles

Louisville is, for the most part, a traditional city. We don’t have much in the way of ground-breaking design being created with our new construction. (Well, except for Museum Plaza.) So while a majority of homes share similar styling, many do not. These properties are overlooked by the majority of home buyers. This makes them prime targets to our bargain hunters. If you see a contemporary home for sale, chances are you’ll be able to purchase this property at or below it’s true value.

3. Relocation Nightmares

For a home seller, a relocation can be a monstrous event. For the home buyer, it can be a wonderful opportunity. Nothing pushes negotiating in the buyer’s favor like a seller who needs to be in Topeka by the first day of the next month. Their loss is almost always your gain.

2. Days on Market

Days on Market (DoM) is the total number of days that a particular property has been for sale. It just stands to reason that the longer the seller has been trying to sell, the more anxious he or she is to get it sold. These kind of sellers are much more likely to drop their asking price even further if someone (anyone!) will come and take this property off their hands. If that doesn’t sound like a bargain waiting to happen, I don’t know what does.

1. Fixer Uppers

Fixer Uppers are sometimes called Handyman Specials because whoever buys this house is most certainly going to need some work done on it before it’s ready to be lived in. Spotting these properties isn’t too difficult at most real estate agents will identify these properties as such in their listing descriptions. I would throw “As Is” properties into this category as well.

Due to the fact that in today’s market most buyers want “move in ready” homes, these fixer uppers generally are discarded from their search list. That means some lucky buyer, who has properly inspected the home’s structure and other vitals, is likely going to get one heck of a deal!

It’s important to note that while I’ve given you the best ways to find a bargain, finding them can still be tough. I wholeheartedly recommend that you take full advantage of your Realtor® to help you track down the deals.

If you don’t currently have a trusted Realtor®, please feel free to contact me. We can chat or meet for coffee. Buyers pay no commissions to agents so it rarely makes sense for any buyer to go it alone.

Why It’s Tough to Sell Your Own Home
In a recent National Association of Realtors^® survey, only 13% of all transactions were done without the help of a real estate professional; 39% of those were “closely held” between parties who knew each other in advance. So clearly, it’s a tough proposal. What are the issues to consider?

1. Setting the Asking Price

The Internet is now ubiquitous. Except for a small portion of our population, the vast majority of Americans utilize the Internet for everything from emailing photos to loved ones far away, to checking the show times for a movie just down the street. With that said, there is a great deal of information available to real estate professionals that is not readily available to the public. Realtors have the expertise to analyze this data and take advantage of it.

Setting a strong but fair asking price is one of the most important factors when selling a home. Often homeowners see that a house down the street sold for $XXX but perhaps don’t know the particulars of the transaction. For example, it’s not uncommon for a seller to add funds to the sale price in order to pay for the buyers’ closing costs. This makes the true market value of the home lower than the stated sales price. Realtors can conduct research on cases like these to give their clients information that would have been impossible for them to get on their own.

2. Marketing Savvy

No two properties are identical. There’s no such thing as a commodity in real estate. Therefore, promoting a particular property should take into consideration the property’s strengths and weaknesses while keeping an eye on what the market is doing.

Realtors are professionals in the field of real estate and should be on top of all the latest trends in their home area. What was hot last year may not be highly sought after today. Putting together attractive flyers, Web sites and more are now all part of a top agent’s repertoire.

3. Importance of the MLS

Properties that are not listed on the Multiple Listing Service (MLS) suffer a huge disadvantage to properties that are. This is simply a fact of life. The MLS is the first place both homebuyers (on their own) and agents (on behalf of their clients) go to find prospective properties. Discount brokers offer to list properties on the MLS for a fee, which is a great start, but in today’s day and age of increased competition it’s really only the essential first step towards professionally marketing a piece of real estate.

4. Professional Networking

Because Realtors are focused on real estate day-in and day-out, they have built up a network of clients, partners and vendors who expand the marketing reach of each property. Here’s a situation that occurs from time to time: a Realtor allows another agent to show Listing A to her client. The client decides this home just isn’t right for her. When the Realtor follows up after the showing to see what the client thought of the visit, he learns more about her tastes and realizes another one of his listings might be a better fit. When the client gets a chance to see this other listing, she realizes that it’s a perfect fit! There is a great deal of synergy in the world of real estate and FSBO properties are often on the outside looking in.

5. Legal Aid

While they are certainly not lawyers (or even legal clerks, for that matter), Realtors are well versed in much of the legal dealings in real estate transactions. As our society grows ever more litigious it pays to be protected, especially in a purchase or sale that involves hundreds of thousands of dollars. When you add the complexities involved with issues like new government regulations, title search clouds, personal safety tests like radon inspections and a host of other legal matters involved in a real estate transaction, buyers and sellers benefit greatly by having a real estate professional on their side.

6. Expertise in Negotiating

Negotiating the sale of an average property involves a range of $20,000, if not more. While homeowners are emotionally tied to their homes, the real estate agent typically isn’t. Without the emotional tie, the agent is free to focus on the negotiations of the deal. An experienced Realtor can also help in the negotiations of requested repairs, which can easily derail a sale. Having an expert on your team alleviates some of the stress involved in negotiations and can often be the difference between a broken deal and the property closing.

7. Personal Security

There are some benefits of having a Realtor that are often missed by FSBO properties and increased personal security is one of them. When a Realtor has the property listing, they pre-screen potential buyers to make sure they are legitimate house hunters and not just wasting time. Then the Realtor accompanies the prospective buyers through the home to make sure the property is kept safe and secure. FSBO owners must show their own properties, which increases the risk of harm coming to themselves or their property.

8. Personal Time

When a homeowner lists their property with a Realtor it gives them more of their own free time to use however they like. This way the Realtor does what he does best and the homeowners can focus on their own areas of expertise. It’s a win-win!

9. Avoiding Risk/Wasted Time

The last thing homeowners want is to be on the wrong end of a bad deal. How do you know if the deal is actually bad, good or fair to both parties? Knowing what other properties are selling for in a given area is a start, but even similar properties aren’t identical. One survey showed that 83% of all properties that start off as FSBO eventually list and sell with an agent. When a Realtor markets the property through his many channels from the start, that is the optimal way to sell a home quickly at the best price.

10. Best Sale Price

The reason most people choose to go FSBO is to avoid paying a larger commission and hopefully make more money on the sale of their home. (Although the vast majority of FSBO transactions do pay a commission to the buyer’s agent.) But what many do not know is that according to a 2006 poll, the home price for sellers who use an agent is 16% higher than those who don’t.¹ There are several factors at work here. One is that homeowners often don’t price the home appropriately from the start and over time, as they continue to drop the price, it conveys the perception that their house is “unwanted.” Another big factor to consider is that when a prospective buyer negotiates with a FSBO, they often assume they will be able to get a deal on the property because they already know the FSBO isn’t paying a partial commission to a listing party.

At the end of the day, owners looking to sell their property want the best sale price possible, with the least amount of stress, in the fastest time. In order to reach those goals, statistics show that using a Realtor beats going it alone.

¹ http://www.realtor.org/

Tre Pryor, a lifelong resident of Louisville, is a Realtor® with Rick Shaw Realtors. A graduate of the University of Louisville with a degree in Marketing, he has 23 years of professional experience, that includes consulting Fortune 200 companies. He uses his Internet expertise to help his real estate clients realize superior results. Mr. Pryor lives with his wife, three sons and daughter in the Springhurst area of Louisville.