Be wary of bargain home listings; many are too good to be true

Think that home’s a steal? Think again

Seeing the word “bargain” in a listing doesn’t make it true. In fact, according to a new analysis, in more than a third of the nation’s largest housing markets, most “bargain” home listings offer little or no savings at all.

A not so great deal

Trulia recently combed through home listings across the nation’s 100 largest markets, looking for ones with “deal, “bargain” or similar money-saving terms attached. Though the terms themselves were prevalent, their accuracy was another story.

According to the findings, 35 markets had “bargain” listings that were at — or sometimes more than — their estimated market value.

Take Cape Coral, Florida, for example. Though nearly 6 percent of all listings in the city are said to be great deals, only a mere 36.5 percent are actually listed below market value. In fact, the price on listings dubbed “bargains” actually average a full 3.5 percent higher than the home’s estimated value.

The same is true in Phoenix. Another spot where so-called bargain listings will actually cost buyers more, the average Phoenix “bargain” home is priced 1.1 percent more than its estimated value.

Alexandra Lee, housing data analyst at Trulia, warns, “Much like Black Friday discounts, listings touting bargains and deals may help bring prospective shoppers in the door. But also like Black Friday, once in the door, you might just end up spending more on that home than you bargained for.”

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Where are the best bargains?

If you’re truly on the hunt for a deal, Camden, New Jersey offers the biggest steals in terms of pricing. About 7 percent of all listings are advertised as bargains. Of the 78 percent of those that are actually listed below their market value? Buyers could save as much as 21.1 percent — or $43,443.

Nearby Newark also offers big savings — just over 11 percent, on average. And in Pennsylvania, Pittsburgh and Allentown “bargains” save buyers 11.2 percent and 14.1 percent, respectively.

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The cities that most accurately label their bargain listings are San Jose and San Francisco, In San Jose, 86.2 percent of all bargain listings are actually priced below their estimated value.

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Want to pull the trigger on one of those bargain home listings in your area? Then shop around and see what mortgage rates you qualify for today.