Although shopping for a home often goes smoothly, there are sometimes some major pitfalls. Savvy buyers can avoid buying a problem property they are not prepared for by doing their due diligence. Here are five tips to know if a home price is too good to be true.
The Sellers Seem In A Hurry
If the sellers seem in a hurry to complete the sale, that should be one of your first red flags. This could be for any number of reasons - the home might be facing foreclosure, the sellers could have accepted a job offer and need to move soon or they could just want to get the process over with quickly. Regardless, you need to get to the bottom of it and find out why.
The Price Is Significantly Lower Than Available Properties Nearby
Another key warning sign that the price on a house may be too good to be true is to compare it to other, comparable homes in the area. If it is significantly lower, this can be a sign that there is some kind of issue with the property. Only look at homes that have sold recently or are currently on the market, as areas change in value over time.
An Inspection Turns Up Issues
You should never buy a property without conducting a thorough inspection first. If the inspection turns up issues that are serious, then you have your answer. You will then be in a position to decide whether you walk away or try and negotiate with the sellers. For example, you might be able to bring the purchase price down further if the sellers are willing to take the cost of repairs off the sticker price of the home. The issue may be repairable with a procedure like underpinning.
Learn If The House Is A Short Sale Or Foreclosure
Another reason the price might seem too good to be true is if the property is a short sale, or even in foreclosure. A short sale occurs when the lender is willing to accept less than what is owed on the property and the owner is hopelessly behind on their mortgage payments. Buying a home that's a short sale is certainly more complicated than buying a property normally, so consult with your real estate agent and do your research to determine what steps you need to take and whether you wish to proceed.
It Could Just Be Superficial
Lastly, it is important to remember that sometimes an undesirable house that's on the market for cheap may just have superficial damage that will be relatively simple to fix. This is why it's important to have an inspection done before you sign on the dotted line. If you are willing to put in the time, money and effort to fix smaller things like destroyed carpets and faded, cracking paint, the purchase might be worth it. You may have a bigger project like foundation underpinning, but depending on the discount you may still come out on top even after repairs.
Buyers should be cautious when approaching a home that seems too good to be true. Ask the right questions and do your due diligence. With any luck, you will be able to gather all the information you need to make an educated decision.
Ridiculous Real Estate Rollbacks: 5 Tips to Know A Price Is Too Good to Be True
