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How to pick the perfect house!

Real Estate Agent with RE/MAX Advantage

I've had a lot of clients and colleagues ask me my opinion about how to pick the best deal. I've come up with a concept. Let's say that you're looking in a neighborhood and there are 3 houses for sale. (Remember, none of this is real - it's just an example)

First, all three houses have the same size lot and are very similar in style and size.

House #1: On the market for $100,000. It's beautiful, the sellers have maintained it better than you could ever imagine. The carpet looks brand new, everything is freshly painted. The sellers don't need to sell, but figure they'd try.

House #2: On the market for $75,000. It's not in bad shape, it'll need carpet and paint. But it's structurally sound. There haven't been any improvements, but the worst thing about the house is that it's dated. The seller needs to sell, they're behind on payments and soon will be facing foreclosure. This house is a short sales situation (selling for less than what's owed on their mortgage).

House #3: Yikes! It's on the market for $50,000. It's scary! All of the light fixtures are missing, the all of the flooring has been torn out, and there is a chance some of the subfloor is bad. There are holes in the walls, we're pretty sure that the power was shut off causing pipes to freeze, etc. The house is a disaster, but it's cheap.

Now, with all of that said. I can't tell you which house to buy. But, I believe that house number two is going to be your best bet. My explanation:

House #1 is the nicest, but it's $25,000 higher.
House #2 isn't the nicest, but with a few minor cosmetic changes (and a few thousand dollars) you could easily have the nicest house.
House #3 is by far the worst, and with all of the problems it'd probably cost $50,000 or more to be the nicest house.

I hope that this gives you a new perspective.