In your hunt for a dream home, most buyers have one question continually running through their heads – “am I going to pay too much?”
Mistakes in real estate are rarely small ones. Paying a few thousand dollars over the odds for a home doesn’t matter in the long run if you are considering your ‘forever home’. But if you truly go beyond market value, it can hurt the bank balance.
The expense of your loan would be greater than it should be and, worse, you have diminished the likelihood of selling at a profit when you decide it’s time to move on.
As an experienced local real estate agent, I have seen a handful of cases where a buyer has pushed the price too high to ensure they weren’t beaten to the deal.
Usually, inflated prices are paid by those caught in the emotion of trying to win the property or haven’t bothered to research the market and understand local price trends.
Below are some tips to help you avoid paying too much for any property. I hope you find them helpful. And in the meantime, if I can help you with selling your existing home, or helping you climb the property ladder, then please do not hesitate to contact me.
- Check-out recent sales – Use data on property websites or talk to local agents about the prices that have been achieved in your target neighborhood in the last three months. This will give you a sense of the market mood. Remember however that online estimates are just automated algorithms and it’s the agents who know what is really going on.
- Compare properties – Focus on the style of property you wish to purchase. Be diligent in comparing the prices of these homes as part of the research.
- Check what’s available – The laws of supply and demand dictate the price of most things, including real estate. If only a few properties fit your criteria, you may find the prices are edging up in response to buyer demand. Reverse the situation, and the opposite is true.
- Watch price trends – For your own financial success, you want the neighborhood to have experienced growth in property values. Check if any improvement to local infrastructure and transport are pending or under way. These can push prices higher, but most of all, it’s a good sign that the city or county is investing.
- Trust your agent – Your agent is there to guide you, stop you from making basic mistakes and save you lots of time in terms of searching for suitable homes. When it comes to determining good value, or fair price, they’re in a prime position to offer advice.
- Gut feel – I’m a big believer in gut instinct. If the price feels too high, then it probably is. And even if it isn’t, that uncertainty will play on your mind for weeks, months or even years. So, make sure you’re comfortable before moving ahead.
- Stick a toe in – If you see a home you like but think its price is a little rich, put in an offer to test the waters. Your proposal should be in the ballpark, or the owner and their agent will dismiss your interest. We can create a strategy for your offer.
- Obtain an appraisal and inspection – Make sure a building inspection is undertaken once you have signed a contract of sale. You should make a successful inspection contingent on the deal going ahead. As your agent, I can also provide advice at this stage.