When searching for a home, regardless of the market, one must be prepared to recognize what is reasonable and unreasonable when it comes to purchasing a home. Buying a home is the biggest investment that a buyer will ever make, so of course you would want to pay a fair price.
Sometimes homeowners include sentimentality in the price, rather than being reasonable and realistic with the monetary value of the home. Even as a seller, it is necessary to recognize the common mistakes of overpricing, to refrain from making the same mistakes. Here are a few ways on how to spot an overpriced home:
Comparisons
The first sign that a home is overpriced that you are contemplating on buying, is if homes in the area were recently sold for lower prices. This is extremely important when selling a home because sellers need to realize that this system sort of prevents them from setting their own price points. If a seller tries to overlook this key aspect, then they can and will lose out on motivated buyers for the area, or particularly, their home.
Current Real Estate Market
Overall, the state of the economy plays a massive role in pricing homes in the real estate market. No matter how much a home is truly worth, it is nearly impossible for sellers to flourish in the market and get top dollar, when the economy is on a downward spiral.
Location
Have you ever heard the, “Location, location, location” answer when asked about the importance of a thriving business? Well, it is sort of the same when searching for a home. In order to get a great and somewhat fair deal on your property if you choose to sell one day, location is key. Here are the factors that play a vital role in affecting the price of a home, which will help you determine if it is overpriced for the area:
- The home is located in an area that is run down, has abandoned homes, and/or has neglected areas nearby
- It’s located near a school that has low ratings
- The neighborhood is a “melting pot” or more diverse (a sad fact that impacts the price, and is viewed negatively by potential buyers)
- Homes that are placed in low-income areas
Maintenance
Whether or not a home is well kept and/or updated makes a world of difference in the price of a home. Remember, minor upkeeps and repairs does not usually increase the value of a home, yet you will find sellers believing this to be a viable reason to do so. When you go into a home that may have an updated kitchen, bathroom, patio, etc., then that could be a leeway to an increase.
Days on the Market
You can spot an overpriced home by how long it is been on the market. Usually, 60 days or more on the market will be a sign that the house is overpriced, even compared to the recent homes listed around the same price. Showings with no offers to buy is further proof that the home is overpriced, and the seller has work to do.
In a nutshell, these are the variables to look for in spotting an overpriced home. As a buyer, it is important to become familiar with information that pertains to one of the biggest decisions of your life, buying a home.
