10 Home Buying Tips for First Timers

As first-time homebuyers scouting for a family home, navigating real estate can be a daunting endeavor. However, with the right strategies in place, you can cut a fantastic deal, securing your dream home while saving potentially thousands of dollars. Here are ten valuable tips to help you spot a good deal and negotiate like a pro.
Written by
Kim Le
Published on
May 7, 2024

How to Find Real Estate Deals

The best place to start on getting a deal is knowing when and where to look. It’s easier to negotiate a deal when the conditions are in the buyers’ favor. Set yourself up for success by looking for signs of the right conditions.

1 - Buy Off Season

October thru December are typically off seasons for home sales, with fewer buyers and sellers on the market. Even with a slower market (lower supply), the conditions tend to favor buyers.

For much of the country, the weather during this period is not pleasant and some border unbearable. More importantly, the timing to close on a house during this time has to fit between school, work, and holiday schedules. School is in full session; work has year end deadlines approaching; and major holidays are around the corner. Therefore, sellers that try to sell during these conditions tend to be rather motived.

If you can muddle through it, it can be a great time to buy. One realtor once told me it’s the only time she buys homes, and that’s good validation.

2 - Target Poorly Marketed & Staged Homes

First impressions significantly impact a home’s appeal. When potential buyers walk in, they want to feel at home instantly. A poorly staged home does just the opposite, consequently costing the seller a potentially good sale.

Yet, a poorly presented home might just be a hidden gem waiting for a touch-up to reveal its true potential. For most of the homes we've bought, we didn't get that feel-good feeling upon first look. But with some (sometimes significant) work, we created our own dream home. Distinguishing between cosmetic fixes and fundamental flaws can unveil valuable opportunities missed by other homebuyers.

3 - Wait for a Price Cut

A listing price cut often signals that a property isn’t moving as expected. While this may indicate a serious flaw, in many cases, the reasons are benign and rectifiable such as initial overpricing or inadequate marketing. Price cuts that are due to an error from the realtor are my favorite deals to swoop in on, because they doesn’t reflect the value of the house.

4 - Contingent Deals Back on the Market

Properties that return to the market due to failed contingencies sometimes carry an undeserved stigma worse than a price cut. However, there is one reason that make contingent deals that come back on the market attractive: the buyer's financing fell thru. Situations like this reflect on the buyer, not the property, making these listings ripe for negotiation.

5 - Estate Sales or Similar

Estate sales are when a person passes away and another person (typically a family member) steps in to handle the deceased’s assets, funeral arrangements, and any other outstanding obligations. Having seen family members go through this process, the home sale is only one task of many on the to-do list for an estate executor. Along with all the work comes heavy emotions. These sellers are looking for swift transactions to settle estates. Their motivation to sell quickly can result in below-market deals, especially for buyers ready to accommodate a rapid sale process.

6 - Look for “Good Bones”

Houses with “good bones” represent solid, well-maintained structures that might require cosmetic changes but stand on firm foundations. These homes aren't always flashy. They are typically older and may have some awful paint colors or wallpaper. However, if the foundation is good, the major structures are updated, and the build and materials are of good quality, then that not so attractively staged house may be a steal. Contractor renovated "modern style" kitchens with "open floor plans" are key phrases to be wary of. They tend to mask underlying issues and are overpriced. Skip the flashy and go for "Good Bones."

Negotiate, Negotiate, Negotiate

7 - Bid Under Listing

If diligent research and waiting have led you to a promising deal, start the bidding process with a lower offer. In all of our home purchases, the final sale price was midway between our initial asking price and the list price at the time of the offer. Therefore, setting the appropriate tone with the initial bid below listing is important.

8 - Hone in on Inspection Findings

Leverage the findings of a thorough home inspection to renegotiate the asking price. Highlighting major repairs or compliance issues uncovered during inspection can serve as a strong bargaining chip in negotiations. In one of our real estate sales, the inspection findings helped the buyer cut the sale price by ten thousand dollars. We similarly leveraged an inspection and title report to get the sellers to complete electrical work outstanding, saving us a few thousand dollars in maintenance down the line.

9 - Negotiate the Real Estate Commission

With the landmark ruling on real estate commission in 2024, it's important to check how those change can affect commissions in your area. Historically commissions were in 4-6% of the sale price with the commission split between the buyer’s and seller's agents. This new ruling can help lower the sale price a few percentages, ie helping the buyer get a better deal, while the seller doesn’t lose out on any gains. The middleman just gets a smaller cut.

10 - Never Fall in Love

Lastly, never fall in love. Emotions cloud judgment. This is the most crucial advice: maintain emotional distance until the deal is closed. Emotional attachment can weaken your negotiating position and lead to overpaying. Avoid entering a bidding war; always be prepared to walk away; and keep looking. The right property will come along.

A Home, Not a House

A real estate purchase is one of the biggest financial transactions that most Americans will engage in. It's a long-term partnership that will have lots of ups and downs. Getting a good price at the beginning helps make the pains later on far more bearable (like when a new roof is needed or when the pipes burst). Be fiscally responsible in the purchasing process so the financial burden of mortgages, taxes, and maintenance is manageable over the duration of ownership.

However, financial considerations is not the complete picture. At the end of the day, your primary residence is more than just a house. It’s a home where your family will live in, make memories, and grow up (or old) together. In the words of Warren Buffet, “For the $31,500 I paid for our house, my family and I gained 52 years of terrific memories with more to come…I wouldn't trade it for anything.”1

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Citation: 

1 Adamcyzk, A. “Warren Buffett once said ‘a house can be a nightmare if the buyer’s eyes are bigger than his wallet’ but thinks his $31,500 investment is one of his best.” Originally on Fortune.com. Reposted on Yahoo!Finance on August 30, 2023.

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