Real Estate Tips: Reconsider Before You Buy That Home for $1
One of the more interesting mortgage trends right now is that of selling homes for $1 (hat tip: Xin Lu at Wisebread). It may seem like a great deal at first, but as with all “deals”, it is important to consider the possibility of hidden and additional costs.
Homes for $1
There are several states, cities and even the federal government that offers homes for $1. In terms of the federal government, these $1 homes are meant to help fulfill a need for affordable housing. Here is what the department of Housing and Urban Development (HUD) says about its Dollar Homes program:
By selling vacant homes for $1 after six months on the market, HUD makes it possible for communities to fix up the homes and put them to good use at a considerable savings. The newly occupied homes can then act as catalysts for neighborhood revitalization, attracting new residents and businesses to an area.
This is an interesting idea, and it might work in many cases. But before you get excited about buying a home for $1, consider the following:
- Many of these homes have been stripped of everything of value. You will have to replace things like wiring and bathroom and kitchen fixtures.
- Some of these homes are fit only for demolition.
- In some places, you only buy the home, not the land, so you have to move the home.
- The location may be less than desirable, and if things don’t improve in the neighborhood, you may have a hard time selling.
It is important to carefully consider the true costs associated with any “bargain” — $1 homes included.
Tags: buy home $1, Dollar Homes program, home mortgage loan, mortgage loan blog,
HUD, Housing and Urban Development, real estate tips
