Amid today’s challenging market conditions, finding a good deal can feel nearly impossible. Prices are high, inventory is limited, and desirable homes often attract multiple offers. However, even in a tough market, opportunities exist for savvy buyers and investors who know where—and how—to look. Identifying undervalued properties requires patience, research, and a strategic approach. Here’s how to spot hidden gems that others might overlook.

1. Look for Motivated Sellers

Life circumstances often create motivated sellers—people who need to sell quickly due to relocation, divorce, financial hardship, or inherited property. These sellers may be more willing to accept a lower price in exchange for a fast, hassle-free transaction. Networking with real estate agents, checking foreclosure listings, and monitoring “as-is” sales can help you uncover these opportunities.

2. Target Properties with Cosmetic Issues

Many buyers pass on homes that need cosmetic updates, such as outdated paint colors, worn carpet, or old fixtures. Yet these are often the most undervalued properties. Minor updates are relatively inexpensive but can significantly boost property value. If you’re willing to put in a little work—or budget for light renovations—you can transform a dated house into a profitable investment.

3. Explore Off-Market Deals

Not all properties are listed on the MLS. Off-market deals, also known as “pocket listings,” are homes for sale that aren’t advertised publicly. Building relationships with real estate agents, joining investor networks, or sending direct mail to homeowners in your target area can help you access these hidden opportunities before they hit the broader market.

4. Research Properties with Long Days on Market

In a hot market, homes sell quickly. But if a property lingers for weeks or months, sellers may become more flexible on price. Sometimes these homes are overpriced, poorly marketed, or simply overlooked. A fresh perspective can reveal value that others have missed. Be prepared to negotiate—sellers with stagnant listings may be eager to close.

Discover: Negotiation Skills: How Your Real Estate Agent Can Get You the Best Deal

5. Analyze the Neighborhood, Not Just the Property

A home’s true value is tied to its location. Look for neighborhoods that are up-and-coming, where values are likely to rise. Indicators include new businesses opening nearby, planned infrastructure projects, or revitalization efforts. Buying in a neighborhood before it fully develops often means getting a property at a discount compared to what it will be worth in a few years.

Read more: What Makes a Neighborhood ‘Good’? Key Factors to Consider

6. Work with Data and Comparables

Run the numbers carefully. Compare recent sales of similar homes in the area to determine whether a property is priced below market value. Factor in potential repairs, rental income (if investing), and appreciation trends. A data-driven approach helps you distinguish a true deal from an illusion of value.

7. Be Ready to Act Fast

In a tough market, undervalued properties don’t last long. Having your financing in place, whether through pre-approval or cash reserves, positions you to move quickly when the right opportunity arises. Speed and decisiveness can make the difference between landing a deal and missing out.

Conclusion

Finding undervalued properties in a tough market isn’t about luck—it’s about strategy. By focusing on motivated sellers, overlooked homes, off-market opportunities, and neighborhood trends, you can uncover hidden deals others miss. With patience, research, and a willingness to act quickly, you can turn a challenging market into a profitable one.