The Expert Podcast

Here's a trick you can use to find a house for sale that would be a good deal. It's not that there aren't houses for sale right now; there's a lot more inventory available than there was even a year, year and a half ago. But a lot of these houses are still priced pretty high, aren't they? The prices are coming down a little bit, but they're still through the roof. So how can you find a house that is priced reasonably? Not just find any old house, but you want to find what you can get a deal on.

Well, let's first look at why houses are priced at the height that they are. Well, it's because the people who are living in that house have a two or three percent mortgage, and if they sell that house, they're going to have to go out and get a seven percent mortgage on whatever they buy. Even if they buy the same priced house that they had—let's say it's a $400,000 house, and they go from a three percent mortgage to a seven percent mortgage. Well, that's four percent extra interest they pay every year. That's $16,000 a year—that's more than $1,000 a month. That's like $1,100 to $1,200 a month more just to buy the same house.

So guess who's going to pay for that? You are. Because they're not going to sell that house unless they make enough profit to pay their new mortgage rate of seven percent. That's why the houses aren't coming down too much in price and they're really not selling.

So what do you do? Find somebody who has a higher mortgage. You can go into the land records in your state, and you can find mortgages that were issued more than seven or eight years ago. If you find mortgages from the 2010, 2011, or 2012 range, those mortgages were six or seven percent, and the person has paid down a lot more than somebody who got a refinance in 2019.

So if you go into the land records and find homes that are financed most recently from 2012, 2013, maybe even 2014, or maybe 2011, those people—you can see right on the paperwork, normally, what the rate is. Those people have rates in the five or six percent range. They don’t really care if they sell their house and get a seven percent mortgage. It's about what they’re paying now, plus they have a big profit. Those are the houses to target.

You can match up that list with what you see on Zillow. You can also match up that list by maybe even sending out postcards to people: "Hey, do you want to sell your house? I want to buy your house." Those people are more willing to move because they’re not going to spend that much more on an interest rate, which means they don't have to pass that cost along to you.

Let us know what you think in the comments, and good luck looking for a place to live.