Whether you have shopped in the real estate market before or not, there are many things that have to be closely examined in order to get the home that is right for you. The price of a home is a large factor when you are looking at a home because you have to have a house that is within your budget. Overpriced homes are easy to come across, and by knowing how to identify an overpriced home you can be sure that you get a home that is at the right price.
Every homeowner thinks their house is worth more than it actually is. It is a natural thought process, but it does not always work that way. One way to identify if the homeowner is pricing their home above what it is worth is by looking at neighboring properties that are for sale or sold recently. These homes should be comparable in size and in the same area as the one you are looking at. If the house you are looking at has a higher price tag than similar homes in the area, this is a good indicator that the home is overpriced.
Days on the market:
Look at the number of days the house has been on the market for. A house that has a high number of days that it has been on the market can be an indicator of an overpriced home. High end homes will typically be on the market longer, but with most homes the high number of days shows that there have been few competitive bids on the house, meaning it is overpriced.
The price should reflect the overall appeal of the home. Customized amenities do not always give a home a higher price tag, especially if it is customized for the previous homeowners benefit and is not something that most people typically want in their home. Some examples are tennis courts, movie theater rooms, large garages, or a swimming pool can be unnecessary amenities that cause a home to be overpriced.
Home improvements also make for pricing to be more difficult. Minor repairs do not add value to the home, but large upgrades such as adding a deck, extending a room, or upgrading a bathroom can add value to the home. Only large improvements should reflect in the price, but minor improvements should not cause the house to cost more. If the house has many minor improvements and the price reflects those improvements, it is overpriced.
Location, location, location:
Location can also be cause for an overpriced home. If the home is in a low-income area, near railroad tracks, or by a school with poor ratings, the location is going to cause the home to have less of a value. The price should be able to reflect the location, if it is in a pristine neighborhood the home will cost more. If the location does not reflect the home’s price, it is overpriced.
Overpriced homes can be easy to spot if you know what to look for. A Realtor can also help you be aware of overpriced homes, but by knowing what to look for you are going to avoid getting into a home that is not worth what you paid for it.
As I have said before, please call a local REALTOR for all your real estate needs no matter how big or small. We are trained professionals here to make your life easier. It's best to surround yourself with the right team of professionals that can continuously give you the right advice for all your circumstances.