Almost 39 million Americans are overpaying for their home. New homebuyers often fall victim to this phenomenon because they do not have prior experience. They do not know how to gauge the value of a property nor how to negotiate the price.
If you want to avoid overpaying for a house, there are certain signs you should look out for. Any of the signs listed below are a red flag and may indicate that the home you’re interested in buying is overpriced.
Signs that Indicate You’re Paying Too Much for a House
Overpaying is a common mistake made by new homebuyers that lack experience. Before you make an offer, consider: is this home actually worth the listing price? Here are some signs to watch out for that could indicate an overpriced home.
The Listing Price is Higher than Other Properties
The first warning sign that a house is overpriced is if the price is significantly higher than the others in the neighborhood. While homes are priced differently based on their size, condition, and features, similar houses in the same area should fall into the same price range. Check the prices of other houses to ensure you are not overpaying. If there is no justifiable reason for a high price, you should take this into consideration when making an offer.
The Home Has Been on the Market for a Long Time
Many properties do not sell due to location, price, or condition. A property may sit on the market longer if it is lacking in one of these areas. If the home you’re interested in has been on the market for a long time, there’s probably a reason. You should think critically about why no one else has bought it. It could be that the home is not worth as much as it’s being listed for.
Check if the other houses in the neighborhood are also not selling or sitting on the market. Is this a trend in the neighborhood? Or is it only this house? If so, the home may be overpriced or there may be underlying issues that you’re unaware of.
That being said, if the home has been on the market for a long time, that could work out in your favor when it comes to negotiating the price. But no matter what, you should definitely hire a home inspector so you know exactly what you’re getting into.
The House is in Poor Condition or Needs Repairs
Move-in ready homes sell faster. Many buyers do not want to deal with the hassle of making repairs. Simply put, a move-in ready home is more expensive because it’s worth more. Regardless, sometimes sellers will list a home at a higher price even if it needs repairs or updating.
Before making an offer, it is essential to inspect the house thoroughly. Schedule a showing and during your visit, look for warning signs that could indicate major repairs. If you can afford a house inspector, take advantage of their services. A fixer-upper is not necessarily a bad thing if the price is right.
If you find issues with the home and can afford to fix them, you could ask the seller to lower the price. However, if the seller is unwilling to negotiate, it may be best to move on.
Get Started with the Homebuying Process
Are you a new home buyer looking for the perfect house? Before you make an offer, it’s important to get prequalified for a mortgage. Contact Mortgage Solutions Financial today to get started with the application process and begin the journey to homeownership!
