| Buying a house is the best way you can create | | | | house does not mean the home owner would not |
| immediate equity. Gaining equity through buying a | | | | sell for the right offer. Although chances of finding |
| house is something which is very easy to do, as | | | | someone to sell there house through this method |
| long as you follow these guidelines. | | | | aren't very high, you can find great deals by |
| If you are seeking to buy a house under discount | | | | making offers that a home owner might just |
| value you must have the right mindset: | | | | take. |
| "The deal of a decade comes along about once a | | | | If you've been to auctions or looked at properties |
| week" | | | | which have not sold in a while and are being no |
| - Dolf De Roos, Real estate investor. | | | | longer advertised, follow up on them. After so |
| Houses being sold below market value are out | | | | much hassle of advertising the house and no sale, |
| there, its just a matter of knowing where to look | | | | the vender may be tempted to sell at a discount. |
| and the buying strategies you use. | | | | Buying strategies: |
| So where can I find houses being sold for a | | | | Instead of looking for properties to purchase, let |
| discount? | | | | the properties come to you. Get your own add in |
| Find motivated sellers. Some examples of these | | | | your local Newspaper saying something like," |
| sellers are people who have experienced death, | | | | Serious property buyer, wants to buy houses |
| divorce, bankruptcy, the less intelligent, people | | | | from motivated sellers quickly". You'll be surprised |
| who have deadlines, and are developers. | | | | at the number of calls you'll receive. |
| Bankruptcy/Foreclosure: | | | | Don't reveal all your cards, as in try not to say |
| When bankrupt an individual will have the option of | | | | why you want the property or how quickly you |
| selling their house to a third party, most likely at a | | | | want to buy. Never make the first offer, let the |
| cheaper price than market value because they | | | | seller make it. Once the seller states their price |
| need the money fast. If an Individual is bankrupt | | | | tag, say you want twice the discount you want |
| and the bank is the creditor, the bank will take | | | | off their price. So for example, the seller says |
| the asset (the house) and have a foreclosure sale. | | | | they will sell it for $100,000 and you want a 5% |
| You will often find a cheap price there as well. | | | | discount, (5% of 100,000 = 5,000. 5,000*2 |
| Death: | | | | =10,000) offer $90,000 and counter offer up |
| Although this may seem like profiting of someone | | | | from there. |
| else's misery, its not really. If the house is not | | | | Staple a check for the deposit payment to your |
| included in the persons will, it must be sold, | | | | next offer. If the seller countersigns the contract |
| someone has to buy it. If the deeds to the | | | | and banks the check they have accepted the |
| property are transferred to someone else there | | | | deal. The psychological impact of this tactic is |
| is often a good chance they will not want to hold | | | | amazing. This tactic shows the seller that you are |
| onto it and want to sell it quickly. | | | | deadly serious about purchasing the property |
| Divorce: | | | | quickly. It is also very tempting to just bank the |
| When couple breaks up things often get nasty | | | | check right now even though they will be selling |
| and they both want to be separated as soon as | | | | the property at a discount. |
| possible. They will often settle on selling their | | | | Don't put emotions into the picture. Even if you |
| house for a lower price but quickly. | | | | are purchasing a house that will be your home, |
| Less intelligent: | | | | just because you think a bathroom looks |
| Sometimes people are selling properties with out | | | | 'adorable' you must not be willing to pay any |
| the help of a real estate agent and will not know | | | | more than its worth! This especially applies at |
| the exact value of their house. They will usually | | | | auctions where the atmosphere makes it very |
| price their houses too high because of emotional | | | | hard to not bid. |
| attachment to it. On the flip side they might be | | | | Can I loose the equity that I have created: |
| ignorant of the real market value and sell it for | | | | Yes, but not likely. If you are savvy about it you |
| less than its worth. | | | | can time your purchased property to gain even |
| Deadlines: | | | | more equity from appreciation of the housing |
| Often the best place to find deals. People with | | | | market in addition to creating immediate equity. |
| deadlines need to sell their property quickly. They | | | | Increase of real estate value by percentage in |
| may be going overseas or need the money fast. | | | | Australian Districts |
| Almost all people with deadlines will sell their | | | | As we can see from the graph, housing prices |
| houses at a discount. | | | | eventually all go up due to increasing demand. |
| Developers: | | | | (Picture found here) |
| In some circumstances property developers may | | | | The only time you can loose money is if you sell. |
| have over extended themselves on a project and | | | | If you never sell you will never loose money. You |
| need to cut their loses. You can pick up discount | | | | may loose equity when the market goes into |
| houses from their mistakes. | | | | recession, but eventually as population and |
| Always ask why the house is being sold so you | | | | demand for housing increases the property you |
| can determine whether the seller is motivated or | | | | have purchased will appreciate. If you are looking |
| not. | | | | to continuously gain equity you must purchase in |
| Other sources | | | | high capital gain areas. |
| Great places to look are under the classified | | | | When the market is booming try to purchase |
| section in the newspaper, look for things like | | | | properties for a 5%-10% discount. |
| "Urgent" or "Heavily reduced". What I love about | | | | When the market is flat try to purchase |
| ads under the classified section is that real estate | | | | properties for a 10%-15% discount. |
| agents are not often involved. This is good | | | | When the market is in recession try to purchase |
| because real estate agents will often try to push | | | | properties for a 15%-30% discount. |
| up the price of a property so it is above market | | | | Now that you've purchased your house or home |
| value. People without real estate agents often do | | | | for a discount and gained equity, you should |
| not know the true market value of their | | | | consider using the equity you've created. After all |
| property. | | | | its just sitting in your home doing nothing unless |
| Just because there isn't a "For Sale" sign on a | | | | you use it! |