Are You Overpaying for Your Home?
The worst news you could receive is that you’re overpaying for your home! In the current market, it is easy to fall victim to paying more for your home than what it’s worth. We understand the push to get the home of your dreams, but now is a time to focus on your needs over desires. The truth is, getting absorbed with the idea of purchasing the perfect home could potentially lead you to overpay for a home. Many items can lead to an individual overpaying for a home, but more times than not, it’s when homebuyers are preparing to pay higher than the appraised value. Purchasing a home is one of the many major financial decisions you will make in your life, and it’s important to have a basis of knowledge before diving into the market. The home-buying process can be daunting, and bringing in prior knowledge will benefit you in the long run. There are many warning signs to foreshadow the possibility of overpaying for a home, but we are here to help! Here are a few strategies to help avoid overpaying for your home.
Different List Price Compared to Others in the Area:
When searching for a home, it’s always nice to stumble upon one that suits your needs. Maybe it has all of the amenities you desire in a home, or it may be in an area you are interested in. Yes, these may be nice, but if the listing price does not align with recent home sales, you may be at risk of overpaying for this home. There is a good chance the seller priced their home based on neighboring values rather than going by what homes are selling for in the area. Make sure to pay close attention to the housing market when making the jump into buying. By doing so, you will be able to spot the obvious red flags. However, finding a real estate professional will take some pressure off and help with the needed research in finding the right home for the right price!
By working with a real estate professional, they have the capability of researching how much the property is worth. They can evaluate homes and give you the best advice based on the information found on certain properties. Consult with a real estate professional who is familiar with the area enough to catch a home that may be outside a valuation tool’s algorithm.
Left on the Market:
It’s rare to see a listing sit on the market for months at a time, especially in this market. When listings sit for an extended period, it could be considered a ‘stale’ listing. Whether a home is considered a ‘stale’ listing or not can ultimately depend on price, location, and property type. In this case, you’ll need to find out how long the listing has been on the market and compare it to the average market times for homes in the area. If the home you’re showing interest in has been on the market longer than comparable homes in the area, there is a good chance it’s overpriced.
Price Matched Similarly to Homes Taken Off the Market:
If the house you’re looking into purchasing is priced like comparable homes that have been taken off the market, it’s because they didn’t sell. By discussing this with your real estate professional, they can access homes that were pulled from the market and check the pricing on those comparable unsold homes. If the home you’re interested in matches the asking price of the unsold homes, it is likely overpriced.
Home Inspection Issues:
After an offer is accepted, the property is subject to a home inspection, and using an experienced inspector you trust will help find any concerning issues with the property. A quality home inspection will help you understand any potential problems that could affect the home’s value. When maintenance issues come up, they can be easily fixed. However, these are costs that someone will have to pay and if that’s you, the possibility of overpaying is high.
Even if you’re new to the home-buying process, you shouldn’t fall victim to an overinflated listing price. If you are new to the market, work with a buyer’s agent! Working with a buyer's agent can help you understand the market and find the best value for your money. Their understanding of the local housing market can benefit you in many ways and potentially land you the home of your dreams. They have insider knowledge of properties currently on the market, houses that are coming soon to the market, and those that have been sitting for a while. All in all, a buyer's agent can gauge a fair house price. Using their knowledge and insight will benefit you and your pocketbook!
It’s easy to get caught up in the emotions of purchasing a new home, but that doesn’t mean you have to overpay to get what you want. The best advice we have for you is to find a local agent with a good reputation, understands your needs, and carries a great deal of local knowledge. If you’re planning to make the jump to purchase a new home, give us a call at (931) 261-9001.