Overpriced homes are common in the real estate sale. Most probably because, the seller thinks that their home is worth more compare to the other homes in the market. For first time home buyers, how would you know that the home you would like to buy is overpriced?
Today I will give you some tips that will definitely help you to determine an overpriced home.
Look at Comparable Sales
This is the easiest way to identify if the home is overpriced or not. If you have chosen a home in a particular area and you already have in mind as to what kind of requirements you are looking for. Let us say, you are looking for a home with 2 bedrooms and 2 bathrooms. You can check the other homes for sale in that area to figure it out if the home is overpriced or not. With just a little research you can get the idea of the average price, for the type of home you are looking for within that area.
The home is listed in the market for a long period of time.
There are a lot of listings that you will find in the market. Believe it or not were seeing multiple offers on some and limited to no activity for others. If a home sat on the market for a long period of time and has a very limited offer to no activity then think again. There must be something wrong with that home. Most common reasons as to why a lot of homes don’t sell on the market, simply because the price was too high.
Repairs and renovations
If there are some repairs, improvements or renovations that have been made, it might be added to the principal amount because of the updates. Adding value for the minor repairs does not apply, so you have to be aware of this.
Check the condition of the home
You have to know the condition of the property that you would like to buy. If the condition of the house is well maintained then it’s worth the slightly higher in price. However, if the home is an old house or it’s not properly maintained by the owner then you will just find yourself, spending a lot on repairs and renovating the property. A slightly high price home is better than spending a lot of money for the home repairs.
Foreclosures / Real Estate Owned Properties
The way bank price foreclosure property is very simple. They’re going to ask the local agent whose going to sell the property to do a BPO. The agent will tell how much the worth of the property and usually price the home much lower. However this doesn’t really matter to the bank. They do this because they are expecting for a multiple offers. So the price will push it upward. When this happens, home buyers used to pay much more without even noticing it.