Overpaying for a Home

By: Jorge Lopez, January 18, 2016

The home buying process as a whole can be daunting, but when it comes to the price it can become especially tricky making sure you’re getting your money’s worth and aren’t overpaying.  If you don’t consider yourself the negotiating type, it’s important that you take the proper strategies to avoid falling into a situation where you realize you’ve overpaid after you’ve already closed on a home.

You may have heard of “comps”, short for comparable sales.  This tried and true method remains among the most effective ways of determining how much a home is worth or knowing what prices similar homes in the area were sold for.  With the right real estate agent, you should be able to find a minimum of three properties to evaluate and compare, so you have a good idea whether the home you’re considering buying has a justified price.

Consider staying away from bidding wars.  If the market is currently favoring sellers because of low supply and strong demand, making an offer lower than what the seller is asking for probably isn’t going to result in a sale and could put you up against other buyers that are willing to pay more.  If possible, opt for a mortgage loan pre-approval and make a competitive offer right from the get-go.

Speaking of real estate agents, you’ll probably want to find one that’s focused on you as a buyer.  This agent should have deep knowledge of the neighborhood you’re interested in or maybe others that you may not be aware of but fulfill many, if not all of your needs.  An effective agent will also be aware of properties that are about to go up for sale.

Remember that in some cases it may indeed be worth shelling out a little extra for a home if it fulfills all of your particular needs.  You’ll need to take some time and determine whether buying the home of your dreams is worth the extra dollars or if it’s worth passing up because of those few extra dollars.

This real estate and financial update is brought to you by FreeValues.com, the #1 provider of free home values on the web.  We provide free house values as well as useful information for sellers.