For most first-time home buyers, purchasing a home can be really challenging. First, there is the overwhelming selection of homes that meet what you are looking for. Then there’s an even bigger difficulty of trying to figure out which of those homes offer the best value for your money, and which ones are just being priced well above their real value.
How does one know that a property is overpriced? Here are some red flags to watch out for:
- The home’s price is relatively higher than other recently sold properties in your area
You should check out the price of recently sold houses nearby. Why? A home’s value partially depends on the price of other homes of similar size and features.
- The home has been in the listing for weeks or months
Properties are usually sold within weeks or sometimes even days after they are listed. When a particular house just stays unsold for weeks, it is not a good sign. It could mean the seller is not that committed to letting it go or it is simply overpriced.
- The number of viewings is too small or the intervals between visits are quite substantial.
Most of the time, if a home is up for sale, you would notice that there is a succession of viewings or open houses organized by an agent. If there hasn’t been any scheduled viewings for quite some time or the open houses are few, it’s probably because it is overpriced and buyers think they should not waste time visiting a property that costs more than its value.
- The price of the property simply doesn’t match the location
You have probably heard of the phrase “location is everything” in real estate, which means that the value of a home has a lot to do with the neighbourhood it is in. So if the neighbourhood is very desirable, you should anticipate a higher price. But if there are limited amenities, poorly-rated schools, and too busy streets, then the price of a home would and should be a lot lower.
- The property has undergone extensive renovations and upgrades
Naturally, a seller would mention any recent remodelling done – new bathrooms, renovated kitchen, additional room or deck, and other home improvements. This is usually done to help sell quickly or even to raise the listing price. While these improvements could be very tempting you should first ask yourself if these upgrades are really necessary and are a plus to its value.
A reputable agent can help you identify properties that are correctly priced. Working with one will give you the assurance that you are not paying more than your money’s worth.