The old adage that says, “If something sounds too good to be true than it usually is” is very apropos for listed housing prices on real estate web sites.
Houses in Your Price Range
When searching for a house, you establish a range, choosing specific minimum and maximum prices. Depending on where you look, and your price range, the type of houses offered in any given price range are often similar to each other in some way. Houses in the same town, the same style, the same age, with the same square footage, and acreage generally fall in or out of your range.
Occasionally a house will pop up in your search that surprises you. The house may be have more bedrooms or bathrooms than other house listings in your search results. What really catches your eye is the price. There is usually a reason a house which is seemingly underpriced comes up on the search results. Read on to find the most common reasons a house that should be listed higher appears in your search results.
Reasons for Underpricing
Unfortunately, in most of these examples, the reason for the underpricing will not be included in any real estate listings. A call to the realtor may not immediately reveal the reason for the incredible underpricing of the house. It may take your buyer’s agent or realtor a phone call or two to discover why the house is so underpriced.
Some of these reasons may not defer you from wanting to see the house. Others reasons that a house is underpriced may keep you from wanting to take a walk through. If you want to save yourself some time, before you request a viewing of an undervalued house, determine if the house falls into any of the following categories. Also, know which situations resulting in an underpriced houses are ones which you are willing to consider in your new home purchase.
Bank Foreclosure Not all bank foreclosures are noted as such in real estate listings. In fact, oftentimes this “minor” detail is overlooked by the real estate listing agent. It is important to know that a house is bank-owned before you become too interested in a house. It is more difficult to negotiate price with a bank than it is with your average home seller.
Another reason to know the house is a bank foreclosure before pursing a viewing and doing research on the neighborhood, both investments of your time, is that bank foreclosed houses may have been unoccupied for some time, and are in a state of neglect. This will be more work for the buyer, and more money.
Half-Price House When you come across a house which is mysteriously underpriced at an amount that is practically half of what it should be, double check the real estate listing. Check the section of the real estate listing that lists the acreage of the underpriced house. There may be no mention at all of any acreage for the underpriced house.
While a quick call to the realtor will give you the reason, the most common reason an underpriced house listed at such a low price is because only the house is for sale. The underpriced house is for sale, and will need to moved, by you, because the land is not for sale.
Half-Renovated A house which is underpriced, with no apparent reason mentioned in the real estate listings may be a house which is partially-renovated. The previous owner began deconstruction, started renovating, and abandoned the project less than half way before completion. the house is underpriced, sometimes even below its assessed value, because it will cost tens of thousands of dollars to put the underpriced house back into a livable condition.
While these situations may not scare off all potential buyers of the underpriced house, it is good to know which of the underpriced house situations you are willing to consider before further pursuing your interest in the underpriced house.