Why the Cheapest Home Is Not Always The Best Deal

We all can agree on one thing when it comes to looking for a home in this market....we want to buy the house for the least amount of money that gives us the greatest value for our dollar. But, is buying the least exepnsive home always the best deal for you?

I,for one, love shopping for bargains. I have been accused of waiting for a sale to buy something unless it is an absolute need. I did that with the last home I purchased as well. But, is buying the cheapest home always the best deal for you? There are some variables that you need to take into account when you are looking to purchase a home.

If it is priced signifcantly lower than the rest of the homes in the neighborhood; what is wrong with it? And are you in a position to do those repairs needed to bring the home to the stnadard of other homes you may have been looking at? And if so, at what cost? There is an old adage that my dad used to tell me: "if it is to good to be true; it probably is". That probably hold more true for real estate than anything else right now.

You may be able to purchase a home for as much as 40% to 50% less than the comparable home in the neighborhood is sellign for...but at what cost? If all your savings are going into the down payment and closing costs; where are you going ot get the money to do the repairs? Do you have the time to do them? Does the cost of doing the repairs outweigh what you can buy a home in the neighborhood that does not need repairs for?

I recently had a buyer who negotiated on a home that was substantially less expensive than the others in the neighborhood. From the naked eye it appeared the home was in need of some cosmetic repairs and updating. Nothing to expensive and nothing that would inhibit them from living there if they could not get the repairs or updating done immediately.

However; after having a home inspection; what began as a few thousand dollars to fix a few items and do some updating turned into over $30,000 when the home inspector got done with the list of items he found wrong with the house. Now, that home that was priced 40% less. However; it was not looking like that great of a deal anymore. Besides the large amount of money they would have to spend...going to another home without the repairs would have cost them $83.00 a month more in their mortgage payment versus coming up with over $30,000 just to live in the less expensive house. For them the value of not having to spend the money outweighed the cost of repairs.

Now, there are deals out there. Banks and homeowners will make mistakes and homes will be priced substanitally lower than they should be. You need to look at it as the exception and not the rule. Your best deal may not be the cheapest home in the nieghborhood...it is the one that gives you the most value for your money......

Dave diCecco
Realtor/Broker
www.davedicecco.com