Black Friday to Cyber Monday is a wonderful time to score some great gifts at a nice discount in preparation for holiday gift giving. At the same time, the holidays are also a fabulous time for buyers to land an incredible real estate deal at a discount.
If you have been following the blog for years or have been a client, you know I believe Thanksgiving Day to New Year’s Day is the Black Friday to Cyber Monday period for great residential real estate deals, so make sure to take advantage of it!
Steps to Score a Great Deal Right Now
The real estate market changes each and every year, so your strategy needs to change along with it to land the very best purchase possible. Here are your shopping “parameters” to score the biggest discounts in and around the South Bay.
- Focus on properties with extended days on market.
- See if the Sellers have made a price reduction or have taken the property on and off the multiple listing service (MLS).
- Make an offer that will be a bit embarrassing or what most call a “lowball offer.”
- Do not be afraid to walk away from the negotiation.
Extended Days On Market (DOM)
My first rule of advice: STOP looking at brand new listings everyday. The newest and accurately-priced listings get the most eyeballs and will sell quickly in an efficient marketplace. The most important thing to do is mine the MLS for properties that have been on the market for three, six, nine month, or longer. Those Sellers are beginning to tire and have probably gotten very little action from buyers.
Reduced Asking Prices
Next, to spot a real Seller, look for reduced asking prices. Better yet, find a Seller who has been on and off the market with multiple real estate agents. Anyone who is chopping their price, going on and off the market, or changing agents is working hard to get their property sold. They want to do a deal and the combination of days on market and price cuts makes for a ripe prospective Seller who just wants to move onto the next chapter in their life.
Make Embarrassing Offers
Most likely, these Sellers priced their properties way too high. As a result, no one has taken the property seriously or made any offers. At this point, Sellers are wavering on their idea of value and psychologically are down on their property. If you make an embarrassingly low offer, you might be very surprised with what they might counter to try and keep you around.
Walk from Negotiations
The best, and I mean the BEST way to get a great deal is to walk away from negotiations. If a seller loses a buyer after months on market, price cuts, and countering you with a surprisingly low counter offer, imagine how they will feel if they lose you? Let them sweat during the holidays while they are getting zero interest from the market. Then, come back a couple weeks later and start all over again…they may come down even lower.
The key to all of this is twofold:
- You cannot be emotionally attached to a particular property. Know thyself and make sure you are working a deal strictly for the numbers. It is hard to do, but try your best.
- You need to find an agent that is in it with you for the long haul. Agents who need to make a commission to pay the next bill or are in it to move onto the next deal will not have the patience you need. To work a Seller down or wait for the right property to grind the price down lower requires a special agent.
Some Example Properties to Consider
I have no idea what properties are ripe for the picking, but you just do not know until you write an offer. So, make those freaking offers!
Below are some examples that could be a target to land a fantastic deal…
- 3609 Paseo Del Campo, Palos Verdes Estates
- 4 bed, 2 bath, 2,015 sq. ft, 10,498 sq. ft. lot
- Asking: $1,749,000
This property has been shopped on and off the market for the past couple of years. The listing debuted on the MLS asking $1.998 million in 2017. It went to escrow that year and then fell out. Now, over two years later, the Sellers are asking $1.749 million after a second failed escrow. This is a flat, 10,000 square foot lot that would yield a brand new home with a value of $3.5 million. Land value is right around $1.5 million. In theory, you are getting the existing home structure for only a couple hundred thousand dollars. Do some minor upgrades and land bank this lot for the future. Why not put in a lowball offer and potentially make a great holiday deal?
- 2117 Grant Avenue #3, Redondo Beach
- 3 bed, 3 bath, 2,013 sq. ft., 7,503 sq. ft. lot
- Asking Price: $779,900
This REO has been on the market for the last nine months and has reduced the price $90,000 over that time period. This is a fixer, but is being offered at a very low $387 price per square foot. Banks are not as hungry as they used to be to offload real estate from their books, but this one has to be a drag on their balance sheet. The asking price is already intriguing, but start at $600,000 and see what their first counter tells you. If they come down big and you can land it below $700,000, then this has deal potential. Or, if they make an uninspiring counter, then move on to the next one.
- 128 18th Street, Manhattan Beach
- 5 bed, 6 bath, 3,991 sq. ft., 2,697 sq. ft. lot
- Asking Price: $6,750,000
This is a walkstreet property that was built in 2012 and offers a ton of value. It first came onto the market in May of 2016 asking $9 million. It was recently cut from $7.395 million to $6.75 million. The current owners bought it as a new construction home for $5.65 million in 2012. Obviously, their asking price is not too far away from their original purchase price from eight years ago. I think this is a home that has a lot of motivation behind it and is a deal you can score close to a purchase price from almost a decade ago. Hard to lose on this one if you can bring it down even more.
- 812 Via Conejo, Palos Verdes Estates
- 7 bed, 9 bath, 7,826 sq. ft., 24,815 sq. ft. lot
- Asking Price: 6,990,000
This massive 7,800 square foot estate is a rare find in Malaga Cove and started its listing journey at $9.99 million over 13 months ago. After cutting the price by three million and re-listing, there is a clear motivation to sell. To buy a massive house and lot in great condition with Queen’s Necklace and ocean views with a five in front of it would be considered a fabulous deal. The Sellers may protest a $5 million offer but why not try and see if something sticks?
Conclusion
The next four to six weeks is the perfect time to employ the above strategy. These four examples are just a few of hundreds of options throughout the South Bay to work on for your next “Black Friday” deal.
Do your homework, don’t get attached, make low offers, and do not be afraid to walk unless it is a smoking hot deal.
By the time Spring 2020 arrives and the market comes back to life, you’ll be happy you scored yourself a holiday steal at an incredible discount.