For many people the idea of undervaluing their house is unimaginable. However, there are still many sellers who sell their property at below the market value. There are a number of reasons for this beyond the property being dilapidated or having something wrong with it. Last Minute Moving
Looking For A Quick Sale
One of the most common reasons for a property to be sold below market value is when the seller needs to sell the property quickly. It is easier to sell a home that is undervalued than to sell it at market value. There are many reasons why people may need to sell their property quickly. If the seller is moving to a different state or country, they will often need to sell their home before they leave and in these cases, a quick sale is ideal.
The Housing Market
The housing market will play a large role in the price a seller can get for their property. It can also lead some sellers to undervalue their home when there is a high supply of similar homes on the market. When the supply is high, buyers have the chance to be more selective and they will generally look at renovated properties. If the seller does not have a renovated property but needs to sell the house, they will generally undervalue it to increase the chances of a sale.
Divorce And Downsizing
When a couple separates, the sale of the house can be an option that is best for the divorce proceedings. In many of these cases, the price that the property sells at is not the priority. The priority will generally be the speed of the sale which will impact the speed of the divorce. Of course, there are other cases where a lower sale value is more beneficial to one party in the divorce.
Downsizing is similar to divorce cases as the price of the sale is not the most important aspect. When people downsize, they will generally need less capital for their new home which means that they do not have to get market value for their larger property. Additionally, when downsizing, many people would like the sale of their larger home to be completed quickly.
Another common reason for selling a property below market value is when the seller is in financial distress. This financial distress could be anything from increased debts to being unable to pay the mortgage. At these times, the only asset the person may have is their property and a lower value quick sale could save them from their financial issues.
When people see properties being sold for below market value, they will often assume that something is wrong with the property. This is not always the case as there are many reasons why a seller will sell their property for less than market value. The seller may be in financial distress, may need to make a quick sale or could be faced with the market with a high supply of similar homes.