Why the Cheapest Property Isn't Always the Best Deal

A low price on a property is not automatically a good deal. In most cases, a price significantly below comparable listings is information, not luck.

Here's what a below-market price usually means.

The property needs work. The most common reason a property is priced below comparable listings is that the condition requires investment. Structural issues, outdated systems, cosmetic work across the whole property, or renovation that hasn't been done to a standard that commands full market value. These aren't reasons to avoid the property, but they are costs that should be reflected in your total budget. A property that's $30,000 below market but needs $40,000 in work isn't a deal.

Read: What to Check Before Buying Any Property 

There's a legal complication. Title disputes, unpaid liens, disputes between co-owners, or complications from a previous mortgage or inheritance: these show up as lower prices because fewer buyers can or will deal with them. A lawyer's title search before you commit is the only way to know whether the low price reflects a problem you can manage or one you can't.

The location has a specific issue. Something about the immediate environment that the listing doesn't mention. Proximity to a noise source, a flood zone, a development that's coming, or simply a declining area where demand is softening. Location research is worth doing even when the property looks good.

Read: What Makes a Property Listing Worth Your Attention? 

The seller needs to move quickly. This is the category where cheap actually is good. A seller who needs to complete it quickly for personal reasons and is willing to accept a lower price for a fast transaction is a genuine opportunity. This is rare, but it exists. The difference between this and the previous categories is usually visible in the seller's communication and the condition of the property.

Cheap isn't a category. It's a signal worth investigating before you get excited.

Find properties worth the price at thehouse48.com.