More often than not sellers think their house is worth than it actually is, more than fair market value. And that’s understandable because they have an emotional attachment to their home and can’t really look at it objectively. As a buyer, though, you don’t want to make a too high offer on an over-priced house. There are, however, some tell-tale signs to keep an eye out for. So here’s how to identify an over-priced house in .
Priced Higher Than Similar, Neighboring Houses
A dead giveaway in identifying an overpriced house in is when it is priced higher than similar neighboring houses. If the house is comparable to those around it – with nearly equal square footage, similar floor plans, the same number of rooms, and no special features – then it should be priced about the same. So if a house you’re considering is priced thousands more than similar houses just down the street, beware. This is an area of pricing where a comparative market analysis (CMA) is a valuable tool. Your agent can perform a CMA for you to determine the fair market value of the home and how it stacks up price-wise against other homes in the neighborhood. (To find out more, call 866-593-7012.)
Neighboring House(s) Sold Faster
If comparable neighboring homes have already sold (perhaps quickly), this too could be a sign that the one you’re looking at is an over-priced house in . Again, you’ll need to consult your agent and the CMA to ensure that the homes actually are comparable, that there is no significant difference to account for the price and selling-speed difference. As a general rule, similar homes in the same area should have no huge discrepancies in how fast they sell. If you are considering a house where similar neighboring houses are selling right off the bat, then that house is likely over-priced.
Too Long on the Market With No Offers
Similarly, if the house has been on the market for a long time with no offers, this is a pretty good indication that it is an over-priced house in . In fact, this is probably the best indication that it is over-priced – unless there is something drastically wrong with it. Your agent can find out for you whether there have been any offers. And if you discover that the house has been listed for months on end with no offers – not even low-ball offers – then the seller is probably asking way more than it is worth.
In addition, even if there have been offers, a long time on the market is a bad sign price-wise. It is a top indicator of a house being overpriced. Just keep in mind, though, that high-end homes are typically on the market longer before they sell, not because they are over-priced, but simply because of the higher price.
Condition Not Matching Price
Another way to identify an over-priced house in is to compare the condition and features against the price. Is there a match, or is it out of balance? In order to find out, you’ll need to inspect the house carefully to determine its condition. And if your inspection reveals that the condition doesn’t warrant the price, it is likely over-priced. If you’re not sure, you can lean on your agent’s expertise to make this determination.
Really, though, the best way to identify an over-priced house in is to let your local real estate agent make that call. Because your agent knows the local market inside and out, she will easily be able to spot an overpriced house – and advise you so that you don’t make a too-high offer. Our experienced agents are ready to assist you. To find out more, contact us today at 866-593-7012.