When a house has been in the listings for a long time in a hot housing market, you may have some concerns about what a home inspection would reveal about that property.
Buying a home isn't solely about what you imagine yourself doing in the property for years down the road. You're also concerned about how well the home will accrue equity and whether you'll have similar trouble passing the keys onto new owners in the future. You should have some questions while considering a seemingly unsellable home, but such properties can actually work to your benefit. Even if you're one of the many potential home buyers who were repelled, it may be worth your while to take a second look.
Here are some reasons why you should buy a house that won't sell:
More affordable options
After a home has been on the market for a while, many sellers are willing to drop their asking price down in hopes of netting buyers. This is where opportunity knocks.
With all the other expenses that go into buying a home, including the down payment, appraisal costs and property inspection fees, you want to save money where you can. A house that's been on the market for a while can be your ticket to savings. Additionally, if you or your agent negotiate with the seller, you may even be able to push the price lower and get the homeowner to accept more of your contingencies.
Moreover, a less expensive home means that you'll likely have a lower down payment. This benefit can further reduce your out-of-pocket costs at the closing table.
Sometimes the house is an ugly property, in visible disrepair or the seller or selling agent isn't doing enough to attract buyers. Whatever the case, you have a chance to capitalize.
Unless housing demand is high and consumers are grabbing any available property they can find, you'll have less chance of getting into a bidding war for a property that no buyers want.
This also helps with getting sellers to negotiate on your terms, as they're less likely to dump your offer for another one. Furthermore, you can speed up the home buying process, as the constant back and forth between your agent, other buyers' agents and the sellers can be time consuming.
A chance for customization
To be sure, few home buyers are happy about funneling more money into a fixer-upper after closing on the mortgage. However, you stand to benefit with a few more dollars and possibly some elbow grease.
Given the savings that you can realize when purchasing the property, you'll have some money left over to make necessary updates. This can include changes that add to the home's equity, such as granite countertops, stone landscaping or a deck. You can also spring for aesthetic projects such as new paint and siding. If you're handy, you can continue to save by taking on some repairs yourself.
Keep in mind that there are some projects that should be left up to professionals. For roofing and electrical repairs, for example, you'll want to call the experts. The house inspection should reveal any major issues that require more than a few nails and a hammer to fix.
No matter what kind of home you purchase, make sure you understand its condition. Sometimes other buyers stay away from a property for good reasons, and you need to determine whether the cost of fixing any issues will offset the money you save.