Why are properties sometimes sold below market value?
There are many reasons for this, but the common theme is that the seller is motivated to sell. To such motivated sellers, the speed and certainty of the sale is very important, so they are willing to sell it at a discount.
Some of the common reasons are:
- separation or divorce (a former couple needing to sell and move on with their lives)
- paying off a debt (for example to avoid repossession)
- inheritance (where the beneficiaries don’t want to own the property, but would rather cash in their share)
- relocation (overseas or to another part of the country)
- to buy another property which suits their current situation (downsizing or upsizing)
- to be near family members or a specific school.
On average, residential properties can take anywhere between 3 to 4 months to complete, and statistics show that nearly a third of house sales fall through for various reasons. Where a seller wants speed and certainty of a cash buyer, or one without a chain, they will be inclined to reduce their selling price.