3 Signs Of An Overpriced House For Potential Buyers
Emma Tomsich3-minute read
October 06, 2021
As homeowners, we can often be blinded as to whether we’ve overpriced our house. It’s easy to see why we all think our homes should be listed at the highest price: Home is where the heart is.
It’s where you’ve shared family dinners and friendly gatherings, where you’ve watched your kids take their first steps and get ready for their first days of school.
However, when the tables are turned and you’re shopping the real estate market for available homes as a buyer, it’s important to know how to spot an overpriced house.
Buying an overpriced house is a mistake you most certainly want to avoid when purchasing a home. One of the pains of homeownership is building equity in your investment, and buying an overpriced home will make building equity a difficult task.
And there’s nothing worse than buyer’s remorse on a home purchase. Not sure if the open houses you’re seeing are listed too high?
Don’t worry. We’ll help you spot the signs of an overpriced house and give you strategies to negotiate a final offer that doesn’t break the bank.
How To Know If A House Is Overpriced
1. The Home Is Listed Significantly Higher Than A Neighboring Property
Houses in the same neighborhood with a comparable floorplan will likely be within the same general price range. So pay attention to neighborhood trend reports and take note. If the open house you’re viewing is priced $50,000 more than another open house down the street, you’re likely looking at an overpriced home.
To prepare yourself for attending open houses, have your buying agent complete a comparative market analysis (CMA). A CMA looks at homes sold within the past 6 months in a specific neighborhood to help you better understand your prospective neighborhood’s price point.
If the home you’re looking at is priced much higher than others nearby, it might be time to walk away.
2. A Neighboring Home Sold Much Faster
If other homes nearby are selling faster than the home you’re interested in, it could be a sign that the home is overpriced.
Double check those comparable homes and their listing prices. It’s likely you’ll find homes in the local real estate market that are selling for less.
Though the house you’re eyeing may be nicer or larger, rarely will there be a significantly large discrepancy in prices from one neighborhood home to another.
3. The Home Has Gotten No Offers
This is the big, and probably the most obvious, red flag as to why a after months on the market is overpriced. Your real estate agent should know if there have been other offers made on the home you’re considering.
If the home has been listed on the market for months and it hasn’t received one offer, there’s a good chance it’s overpriced.
Getting no offers, or even relatively lowball offers, is a strong sign that that the sellers are asking far more than what the real estate market (and other home buyers) think the home is worth.
Bidding On A House That’s Overpriced
That’s why we’ve provided you with the best strategies for bidding and negotiating on houses that are overpriced.
Work With A Verified Agent
Buyer’s or REALTORS® are well-equipped to spot overpriced homes on the real estate market. Working with a Rocket Homes℠ Verified Partner Agent can also add value to your home buying experience with their expertise and personalized recommendations.
Gather The Evidence
Remember when we talked about having your buying agent complete a ? You’re going to need to find that CMA and other documentation to offer as proof of pricing. Home buyers and their agents will use this documentation to lower the buying costs.
Learn Why The Seller Is Selling
Knowing the reason a seller is selling their home can potentially help a buyer arrange a lower price on a home they deem overpriced. Because sellers who need to sell quickly are often more willing to negotiate, it’s better to have that conversation with a seller than regret it later on.
Sharpen Your Negotiation Skills
One of the most effective ways to lower a final home price is by negotiating with the seller and the seller’s agent. There are many benefits that come with negotiating, so learn when navigating a high asking price.
The Bottom Line: Know The Clues Of Overpriced Homes Before You Buy
The best way to tell if a home is overpriced is to work with a buyer’s agent who specializes in your desired neighborhood. If you’re worried about purchasing an overpriced house, a real estate professional will be able to spot one right away and will know the negotiation strategies to nab it at a lower price.
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