Has it ever happened to you that when you are hunting down a home to buy, and every one of the houses are exceeding your budget? Have you found a beautiful home and the price is way below the market fitting perfectly into your budget? Is the home price fake or real? Stress not, California55Plus Real Estate will explain the reasons why some homes are under or over-priced.
Short Sale Homes
In a short sale, the broker communicates with their mortgage lender to decide on a reasonable value that is less than the sum they owe on the property. Thus, the moneylender agrees to accept a lesser amount in order to sell the property. The broker doesn’t need to experience a loss; the purchaser gets the property at a discount, and the loan specialist avoids dealing with the burden of getting rid of the property. Dealers need to realize that a short-sale deal might harm their credit, however not as much as a foreclosure. Likewise, moneylenders will agree to a short-sale if the broker is behind on payments and has received a default notice. Buyers might get the property at a discount, with the exception of having to do more paperwork and research than on a normal sale.
When a homeowner can’t make their mortgage payments every month, the property then goes to the bank for them to do with as they please. Houses in foreclosure get sold by the banks at a discounted price.
Are Home Prices Cheaper in a Bad Location?
Sometimes, the house is located in a place that is undesirable; the property becomes virtually unsellable. An expressway is running overhead, a shopping center is too close, a landfill or a power plant nearby can make any seller lower the price of the house. Homes located in questionable locations lose a percent of their value.
A fixer-upper is a property that will require extra work (refurbishment, remaking or overhaul), however, it can be lived in as long as it passes all the proper inspections.
Fixer-upper properties are ideal for buyers looking to raise the value of the home and potentially make a profit. A term also known as “flipping” is where a buyer finds a home, transforms it into a beautiful, livable, and upgraded property, then turns around and sells it for a pretty penny. Fixer-upper homes are also great for a young couple looking to make their first home purchase.
Without the proper knowledge or experience, you may think a particular fixer-upper home is a “great buy,” but you could be making a huge mistake if you don’t look at all the expenses in repairs that it may need. Structural and administration issues, and a home’s establishment or pipes, (which may not be noticeable initially) can require costly contracting work.