Financial Advisor

Why Do Houses Sell For Below Market Value?

Why Do Houses Sell For Below Market Value?

As the ‘credit crunch’ hits the UK, US, Europe and the rest of the world – many will have noticed the decline in the prices of housing. Not so long ago, house prices globally were on the up and sellers could command a high price for their property. Now, sellers may struggle to shift their house from the market, despite owning a valuable and well kempt property. Houses may sit on the market for months or even years, while all the time depreciating in value. This decline does not seem to be abating any time soon.

While a great many can afford to for their property to stay unsold and in limbo for some time, for an unlucky group this can spell near financial disaster. For those struggling to make ends meet this situation can pose a very difficult problem. In this situation, some home owners have sought to sell at a below market valuation in order to sell their property quickly. Why might this group of people need to do this? Some reasons may include:

Repossessions – sharp rises in bank repossessions have been responsible for a great number of these cases. From 2007 to 2008 alone figures show repossessions up over 40%
Mortgages payments are a constant fear for many, in some cases leading to repossessions if payments are not made. In this case, the owner(s) may be looking to move into a smaller, cheaper property.
A dilapidated or generally run down property may require thousands in repair bills before it can be sold on. For those struggling, the reality may be they cannot afford to pay for this.
There may be other debts the owner(s) may have, such as credit cards, loans and store cards. These may also be guaranteed on the house. A seller may prioritise these debts and decide they need to sell their home to pay for these – potentially buying back their property at a later date or downsizing.

On a different note, the owner(s) could be looking to moving abroad at short notice – hence needing to sell their property within a certain time scale. The seller may need to take what they can get for their property so it can be sold in this time frame.

The above are some example of when a home owner may need to sell their property at below the market value, but there can be many more.

Even if the seller manages to find a buyer in good time, this does not necessarily mean the deal will be completed as soon as they would like. Many problems can arise, such as chain victims and buyers pulling out of the deal. Sometimes this process can take months, and cost money in way of fees.

Many owner(s) will not only need to know they can find a buyer, but also a guarantee that the transaction with the buyer will complete. This is the motivation behind some home owners using the services of a fast cash property buyers service and guaranteeing a quick sale.

If you would like more information and advice on selling your home quickly, don’t hesitate to contact one of our advisors at Quick Property Sales. Advisors are always ready and willing to assist you.

Why Do Houses Sell For Below Market Value? / Author: PJL