You've spotted a fantastic deal on the home market -- but why is it so cheap? The old adage often applies: if it's too good to be true, it probably is. But that's not necessarily a reason to look past an affordable home. You just need to investigate it thoroughly. There could be many reasons why an individual might price a home low that isn't necessarily bad for you.
Is the Home Being Sold Under a Distressed Sale?
If a home is a foreclosure or a short sale, then there's a very simple reason as to why it's low priced: it has to be. Foreclosures and short sales need to be sold quickly and are often already being sold at a loss. But you should also know that there can be complications. Short sales tend to take longer to actually get completed because the bank is also involved. Foreclosures may not be in the best condition because it's possible they have not been maintained for a while.
Does the Home Need to be Sold Fast?
On the other hand, sometimes there's no foreclosure, bankruptcy, or short sale -- sometimes the seller just wants to sell quickly. This could happen if it's part of an estate that's being liquidated or if the home is part of marital assets during a divorce. Do keep in mind that a seller can make up a story for why they want to sell quickly; you should still remain a little bit reserved.
Is the Home Unattractive?
It's silly to say, but sometimes just being unattractive can make an otherwise valuable home undesirable. If the home has been on the market for a while and has unattractive -- but not structurally limiting -- qualities, it may simply be that people cannot look past a coat of paint. Always look at the structure of a house rather than things like paint color, as these things can be easily changed.
One of the easiest ways to tell if there's something really wrong with a home is to pay for a thorough professional inspection. Keep in mind that inspectors aren't going to go into crawlspaces or on the roof unless you pay for a premium service. With a home priced considerably under market, you may want to also get an inspection done by a plumber and an electrician. On the other hand, if everything comes up clean, you may have just gotten yourself a bargain.Share