When it comes to those big purchases in your life, it’s worth it to do a little more legwork if it means saving you a chunk of money. Because when you’re talking about hundreds of thousands of dollars, a chunk of money can really make a big difference. Following this line of thinking, many people who are looking to buy a home often find themselves drawn to those houses that are below market value, hoping that they’ll be able to save some money on the overall cost and have a lower monthly mortgage. However, getting a home below its market value isn’t always as easy or straightforward as you might like to think. So to help you on this journey, here are three tips for buying a property below market value.
Learn Why The Home’s So Cheap
If you find a home that’s priced below what you think it should be valued as, the first thing you should do is try to find out why. While you may have simply found a diamond in the rough, chances are there’s something else going on here that could make your purchase a little more difficult. According to Elizabeth Weintraub, a contributor to The Balance, homes are often put on the market at below their market value because their foreclosures, short sales, fixer-uppers, in bad locations, or just plain mistakes on the MLS. Before you get your heart too set on one of these cheap homes, make sure you understand what it’s priced the way it is and what that could mean for you as a buyer.
Look Carefully At Comparable Sales
In a situation where you find the home you want but you’re hoping to get it for a cheaper price, you need to start by doing a little homework. According to Brandon Cornett, a contributor to Home Buying Institute, looking at comparable sales is a great way to see if you can find some wiggle room in the price of a house. If you see a house in the same area as the one you’re wanting to buy that’s about the same size as the house you want but sold for a few thousand dollars less, you can use this as a great defense for why you think the home you’re wanting to buy should be marked down. To go through this process effectively, try to have your real estate agent help with looking at comps.
Find A Home That Doesn’t Show Well
When someone’s wanting to sell their house, they’ll generally do whatever they can to make their house look more appealing in order to sell for top dollar. So if and when you find a home that hasn’t done this, meaning it doesn’t show well, Brendon Desimone, a contributor to Zillow.com, shares that this could be a great opportunity to get the home at below its market value. Especially if the home has been on the market for a while, the sellers might be more willing to negotiate with you and allow you to get the property at a lower price.
If you’re hoping to buy a home at below its market value, consider using the tips mentioned above to help you do just that.