The Truth about Buying Homes below Market Value
Buying homes today can be a very expensive undertaking. Nevertheless, it can also bring highly valuable and priceless assets.
With the growing market value of most homes, alleged home specialist say that people should think about their lenders first before they even think about buying their homes. In this way, you can estimate and foresee what kind of home you can afford.
This can literally make a good implication of something positive. However, lending money doesn't always provide 100% guaranteed satisfaction. It has its drawbacks and you will always be the one on the losing end.
For this reason, some experts provide more sensible advice such as buying homes that are below the market value. You may not be aware of it but it is possible that you can buy your home below market value. Yet, it doesn't necessarily mean that buying a home below market value is the best solution to today‟s skyrocketing prices.
Buying homes below market value requires guts, strength of mind, and patience to get the best deal. Keep in mind that there is a very strong reason why these kinds of houses are being sold below market value. And most often than not, these reasons aren't something you should be happy about.
Buying a fixer upper home is one of the best targets if you really want to buy a home below market value. These kinds of dwellings are usually being sold on the market at very low prices because of their structural and cosmetic defects.
Fixer upper homes aren't all bad. In fact, you can fix them up and live comfortably like the others, but you still have to consider the cost of expenses you have to take when fixing a fixer upper home.
However, there are other factors that you have to keep in mind before deciding on buying a fixer upper home. Here are some of the factors you have to consider as well:
1. Market condition
Buying homes below market value like fixer upper homes may not be good enough if the market condition is at its worst. This means that if you plan to make a profit out of the present value of your fixer upper home and suddenly the market condition has turned bitter, the idea of buying homes below market value may not sound good after all.
Keep in mind that home market values are constantly decreasing in values. If this is the case, buying homes below market value such as fixer upper homes may bring you problems instead of profits. Even if you have placed substantial investments on home improvements but the market condition is bad, buying homes below market value may not bring you benefits.
2. What you know about home improvements
If you don't have any knowledge about home improvements, buying a home below market value is useless. Why? It is because you can't clearly say that you have made a good buy if you will be spending more than what is necessary. You might just overdo it.
Overlooking the things you need to improve in your fixer upper home can decrease its value. Bad improvements are just as bad as not having to improve it at all.
3. Mathematical analysis
Not all cheap items make good buys. If you really want to see good results out of buying a home below market value, you should know how to mathematically analyze the present and expected estimated values. These things will help you assess if your fixer upper home is really worth your money.
4. Research skills
Buying homes below market value isn't possible without good research skills. You should be skilled enough to conduct extensive inquiries and exploration about the available homes that are being sold below market value to get the best deals.
Houses may still vary even if they are all below market value. It is important that you know how to find the best one with the lowest price.
Indeed, the possibilities of finding and buying homes below market value are endless. However, it is imperative that you know these factors to get the best value even if you are getting a cheap buy.