How to Spot Overpriced Listings
When on the road to home ownership, you obviously want to make sure you’re getting the best deal possible. As made evident in previous blog posts, sellers often overestimate the value of their homes, resulting in an asking price that doesn’t match the home’s true value. Since you don’t want to pay more than what is necessary to seal the deal, ask yourself the following questions to spot an overpriced listing.
Is this price comparable to other homes for sale in the neighborhood?
Take a look at houses on the market in your area that are similar to the home you are interested in. What price are they asking for? What did homes in the area recently sell for? If other homes in the area are listed for significantly less than your potential new home, you might consider offering a bit less than the initial asking price. However, it’s important to make sure the homes are actually comparable. For example, how similar are they in terms of square footage, location, number of bedrooms and bathrooms, or property size? If they don’t share many of the same elements, then it’s quite possible that the home you are looking at is reasonably priced.
How long has the house been on the market?
If a house is overpriced, it isn’t going to immediately sell. On average, homes sell within four to six weeks, so if you find that this house has been on the market for many weeks or even months, it is most likely unreasonably priced. You should also find out how many showings have been booked or if there have been any offers made. If it seems like the home has been getting skipped over, there’s a good chance it’s overpriced.
Is the location worth the price?
Location. Location. Location. It’s one factor that plays a huge part in determining the value of a home. Think about it – a small beachfront home often costs much more than a larger home that sits miles away from the water. It’s quite possible that the home’s location is the main contributing factor to the high asking price, so consider how valuable the location is to you. Is it worth it?
Have there been recent renovations?
After spending a lot of money refurbishing their house, homeowners often times will list at a higher price in an effort to profit off of the renovations. Of course, a newly renovated home should be priced higher than a fixer-upper down the street. However, the renovations might not be worth it if the home has been on the market for a long time without any bites.
Although asking these questions can help you identify overpriced homes, it’s ideal to work with a real estate agent. They’ve seen a plethora of houses in your area and can do a better job at comparing the value of similar homes on the market. Working with an esteemed realtor is the best way to be sure you are getting a great deal and won’t walk away with buyer’s remorse.