It doesn’t happen often, but if you search “houses for sale near me” often enough, you might stumble upon a listing for the grand prize of $1.
Surely no one actually sells a house for that amount, right? But if you aren’t going to sell at that price, why list it that way? There are a few reasonable explanations for this kind of listing amount, but know that few of them result in a sale at that price.
Let’s take a look at a few reasons why you might find a listing or sale at $1.
The most common reason an actual sale might happen at the low-low price of $1 is a transfer of property between relatives. The owner might be trying to reduce their assets or give a child an early inheritance. In a state with sales tax on property or transfer fees, it might also be a way of reducing the amount the new owner has to pay.
Many times, family members are trying to avoid paying gift taxes or reducing the amount of their estate when it goes into probate. While that sounds like a good idea, other considerations might not make that bargain sale a money-saver in the end.
A super-low listing price falls in the “made you look” category of marketing for real estate. Realtors who list houses this way are hoping to get you to look at a listing you might have passed by otherwise.
The owner has no intention of selling the house for $1, and you often see this ploy tried when the realtor can’t figure out the real value of the house.
You might stumble on a $1 listing when a developer is looking for investment partners. The developer is likely looking for a few million dollars but doesn’t have a set amount in mind. Keeping the pricing flexible leaves room to negotiate.
Since the MLS requires there be some price entered, they go with $1 to satisfy the system.
The one place where you might be able to score a $1 house is with listings for rundown and problem properties. These could be houses with fire damage or just generally falling down, which can be attractive to “we buy homes” investors.
It might seem like a good deal at first because you can get a decent-sized lot that should still be worth more than $1. However, the houses could turn into serious money pits or have back taxes or liens.
One other problem is that many of these listings might be in locations where the land can have a negative value. The market has cratered, and the land has no value. But since you still have to pay taxes, you end up in the hole even if you bought it for $1.
Plan to Pay More for a House
If you ever run into a house listing for $1, know that it’s unlikely the owner expects to sell it for that amount. Houses for sale at that price might be a sign the local real estate market has collapsed or it might be a simple marketing ploy. When a house does sell for that little, it could be a means of transferring family assets or a deal structured with other considerations.
If you found this article helpful, check out others on our site about buying a house or finding houses for rent.