Homebuyers want the same thing – to get a home they love within their budget. They certainly don’t want to get ripped off. Home purchase is a huge investment decision, so how do you know that you’re looking at a home that’s priced fairly? Here’s how to know you’re not overpaying on a house:
How To Know You’re Getting A Good Price on a Home
Compare the price with other nearby homes.
If you’re paying a price close or below the recent sales prices of nearby properties, that’s a good sign. Check for listings that were “sold”, not just the price of properties still on the market.
Also make sure you’re comparing apples to apples – same square footage, bed and bathroom numbers, location, condition and so on. Also see if it’s a short sale or foreclosure, they must be the same type.
Consider the Market Conditions and Appreciation
See if prices have been going up or down recently. In a seller’s market, meaning there are more offers per listing on a property, prices will be slightly higher than usual. While in a buyer’s market, meaning there are more houses listed and few buyers are around, then houses are more likely to be underpriced. So it really boils down to the condition of the real estate market. Ask your local realtor for market insights so you can gain more clarity.
You may also want to take into account any possible opportunities or development in your area which will impact value appreciation. A few signs of positive development are having a large company or office space moving in, malls, new roads and railways being built.
The home has spent a long time on the market.
It’s more probable that the home is priced a little higher than it’s supposed to if it has been sitting in the market for quite a while, compared to similar, nearby homes. This means there may be some wiggle room for negotiation, which is often an advantage to a home buyer.
Be Cautious of FSBOs
Without an agent’s guidance, a for-sale-by-owner (FSBO) property may not have a reasonable price for the condition of a home. Plus, there’s also the potential hassles with the processing and legal matters of the sale. Agents know the ins and outs of a home sale so not only will you save money, but also save time. Also, if the price is comparable to nearby homes currently for sale, the FSBO should be discounted because no agent commission is being paid.
You’re better off hiring a real estate agent as they will have knowledge of the market, and homes that are yet to be up for sale!
Hope the pointers above help. If you’re ready to take the next step and buy a home in North San Diego County, contact us and we’ll find you the perfect home.