5 keys to finding housing bargains

Here are Redfin's five tips for getting a sweet deal:

Find listings on the market for 90 days or more

The Daggetts' lakefront house had been for sale for 357 days. "We thought since it's been on the market for a while and since it's an estate sale, maybe they're kind of anxious to sell it," Dave Daggett says. (Estate sales, with empty houses and heirs eager to sell, are an excellent target for bargain hunters.)

Smart buyers have long known that if a home doesn't sell in three months, the listing becomes stale. Redfin says the more deeply discounted homes were 83% more likely to have been listed 90 days or more.

Interestingly, the discounts didn't increase after 90 days, so it's not crucial to wait longer to make a bid.

Try it yourself: The days-on-market statistic originates with your local multiple-listing service. The problem is that you can't see it on all real-estate sites. Here's where to turn:

• Call or e-mail an agent using the contact information on an agency's Web site or property listings.

• Ask the seller at an open house, drop a note to sellers on a for-sale-by-owner site, or post a question about a property at a listing site. The agent, owners, neighbors or other interested onlookers may respond. Find Redfin forums here. On Zillow, use the "Home Q&A," a link on the top left of the property's listing page or Zillow discussions.

• Some real-estate Web portals show days on market. At MSN Real Estate, see the upper right of each listing. At Zillow, see "days on Zillow" at the bottom of a listing's page (under "listing details"). At Redfin, see "On Redfin" in the home's statistics (beds, baths, square feet, etc.) at the top of the listing's page.

Bid low on a fixer-upper

Dave Daggett's eyes lit up when he first saw his lakefront house. The yard was overgrown, plasterboard was missing in places, unfinished wiring dangled here and there, and the roof was mossy. It was ripe for a discount.

Redfin found that bargain sales were 73% more likely to have used "fixer-upper" or similar terms in listings and ads: "People who sell homes before fixing them up are usually more concerned about an easy sale than the best price."

That jibes with a 2003 study by the National Association of Realtors, which found that, on average, fixer-uppers sell for 24% less than other homes. Fixers are increasingly common as sellers grow discouraged and foreclosures increase, Redfin CEO Glenn Kelman says.

Caution: Nystedt, the buyers' agent, warns that "fixer-upper" and similar terms can be misleading. These properties are likely to need more work than the average homebuyer can handle, he says, making them not a bargain, even if they do include significant price reductions.

Try it yourself: Search for terms like "contractor," "fixer," "hammer," "repair," "sweat" and "TLC" in real-estate ads and listings. Use these terms on sites that let you search for properties using keywords. Craigslist is a good place to start.

Bid aggressively on a discounted property

Many discounted homes have sustained not just one or two but several price reductions.

"Heavily discounted homes are 28% more likely to have already been price-reduced," the Redfin study says, adding that with 56% of the biggest bargains, prices had been dropped at least twice before buyers made a bid.

"Once a seller lowers his asking price, he sends a signal to buyers that he is willing to accept further discounts in negotiations," Redfin speculates.

"Probably the area where we've seen the biggest change is in negotiating with builders," Kelman says. "If they can't liquidate and pay creditors, they're in a crunch."

In order to keep his official prices up, a builder may make expensive concessions by throwing in luxury amenities or reducing a buyer's mortgage terms or down payment.

Continued: Try it yourself

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