Can You Sell a House For Less Than Its Value?
The roads leading to — and away from — homeownership don’t always follow the routes we planned. You may be facing a life change that has you wondering, “Can you sell a house for less than its value?”
While the ideal scenario is to receive offers that match or even exceed your property’s worth, there are various reasons why you might consider pricing or selling a home below its market value.
In this easy-scan guide, we’ll explore why homeowners might choose a new route and discuss some practical steps to navigate a below-market-value sale.
Editor’s note: This post is for educational purposes and is not intended to be construed as financial or legal advice. HomeLight always encourages you to reach out to an advisor regarding your own situation.
Can you sell a house for less than its value?
Yes, it’s possible to sell a house for less than its market value. Homeowners often choose this approach due to specific financial needs, personal obligations, or home or market conditions that limit higher offers. Whether it’s about expediting a sale or addressing urgent financial demands, selling below market value can offer advantages for certain sellers.
However, this decision involves weighing various pros and cons, understanding tax implications, and considering other potential impacts. As we dive into the reasons behind this choice, keep in mind that every situation is unique and should be carefully evaluated.
Reasons to sell a house for less than its value
There are many reasons why a seller might decide to part with a property below its appraised or market value. For some, the decision stems from a personal relationship, while others face financial pressures that necessitate a quick or lower-priced sale. Here are some common scenarios where selling a home below market might make sense:
1. You’re selling to a family member or friend
Selling a property to a family member or friend can streamline the process and help you save on certain costs. Often, sellers are willing to lower the price to make homeownership more affordable for their loved ones. By reducing the price, you may also avoid back-and-forth negotiations or complicated financing arrangements, which can make the transaction smoother for both parties.
2. You’re only receiving low offers on the open market
When the local market is slow, or your property isn’t generating the interest you’d hoped, you may only receive offers that fall below your asking price. Rather than holding out for an ideal offer that may not materialize, accepting a lower offer might be a pragmatic choice, especially if waiting longer isn’t an option due to the availability window of your new home.
3. You need a quick sale through a low listing price
If you’re working with a tight timeline — whether due to a job relocation, a change in personal circumstances, or a desire to avoid showings and open houses — pricing your home below market can speed up the sale. In most cases, lower-priced homes attract more buyers, which can help you sell faster and move on to the next chapter.
4. Your home requires costly repairs you can’t afford
Homes that need major repairs or updates may struggle to sell at market value, as buyers are often wary of properties requiring extensive work. By pricing the home lower and selling as-is, you acknowledge the investment that the buyer will need to make, which can attract buyers looking for fixer-uppers or investors interested in renovation projects.
5. You are facing a financial hardship or underwater equity
For homeowners in financial distress or who owe more on their mortgage than the property’s value, selling below market might provide a way out. This approach can prevent foreclosure and help you alleviate financial strain, even if it means walking away with less than anticipated.
6. You inherited a property you can’t or don’t want to maintain
Inheriting a property can be a blessing, but it also comes with responsibilities. If you’re not in a position to maintain the home or simply prefer to liquidate it quickly, selling at a lower price can provide a straightforward exit without prolonged upkeep or added financial burdens. This reason is especially common when the inherited home is located out of state.
