Are You Paying Too Much for Your Home?
Buying a home is one of life’s most complex experiences. Over the course of the entire process, your emotions can easily run the gamut from excitement to being stressed out to frustration and back to excitement again, often multiple times over.
Just like buying a new car, it can be all-too-easy to fall in love with a home and get caught up in the whirlwind of negotiations, especially when you’re buying in a seller’s market. Unfortunately, it is only after the excitement wanes and reality starts creeping back in that you might start wondering if you just might be paying too much for the home.
If you are entering the buyer’s market and want to ensure that you don’t get caught overpaying for your new home, here are five telltale signs to watch out for.
#1: The Home is Priced Substantially Higher Than Comparable Homes in the Area
Homes that are priced significantly higher than comparable homes in the area are usually priced by homeowners who look at area home values when listing their homes for sale. The problem with this is home values aren’t always in alignment with how much homes are actually being sold for. Thus, before you get too wrapped up in a home, always research the current housing market in that area and take the community forecast into consideration.
#2: The Home Has Been On the Market for a While
Homes are selling fast these days, so if you find that the home you are looking at has been on the market for a while, that could be a sign that it is overpriced. Of course, there are always other reasons why a home might not sell quickly, like condition, location, and property type, so you should always check these things as well before making your final decision.
#3: Online Valuation Tools Suggest a Lower Listing Price
Online valuation tools make it easy for home buyers to see accurate property values, so before you put in your offer, use one to check the home’s value. If you find that the listing price is higher than what the valuation tool estimates, then you might be paying too much for that home. Then again, online valuation tools do not always take into consideration things like home upgrades, so there is a chance that the home might be appropriately priced. If concerned, you should always ask your realtor for their advice or insight.
#4: Home Inspection Issues
Getting a home inspection before buying a home is must because it can bring to light any potential (and costly) problems that the home’s new owner might inherit. But it’s also important because if your home inspection report comes back with some issues found and the seller doesn’t adjust the price, then you will most likely be overpaying for the home.
If the issues aren’t enough to make you walk away from the home, you should at least factor the repairs into your negotiations and ask for a reduced price for the home.
#5: Listing Price is Similar to Homes Pulled From the Market
When researching home values, ask your realtor for data on homes that were pulled from the market because they didn’t sell. If you discover that the listing price for the home you are interested in is similar to those that were pulled, then that is a red flag that it is priced too high.
Buying a home is part of the American Dream, but if you pay too much, it can quickly turn into a nightmare. Getting a great home at a great price is a balancing act that requires patience, research, and due diligence. Keep an eye out for these five warning signs to help ensure you end up paying an appropriate and fair price for your new home.
