What does this July weather and the current housing market have in common? Both are hot, hot, HOT. Tons of people are buying and houses are often going in days (or even hours). When things are at such a fast pace, you can easily get sucked into offering on just about anything.
Fast paces can be fun, but not when you’re competing on already overpriced homes. Learn how to tell if a house is overpriced — and preferably before you put an offer in!
It has spent a long time on the market.
This tends to be the best indicator that a house is overpriced. If you’ve seen a house on the market for a year or longer, there’s a good chance you can put in a lower-than-usual offer. Granted, sellers will probably throw your offer out the window if it’s too low. Talk to a real estate agent to get more insight on the property and for guidance in making an offer.
PS: If you’re a seller in this situation, bring your property to RealtyHive! Our time-limited events mean that you keep the integrity of the list price while getting to open up the conversation with more buyers.
The numbers don’t match with similar homes in the neighborhood.
If the 3-bed, 2-bath that you’re looking at doesn’t seem all that different from the 3-bed, 2-bath down the street, but is listed as $20k+ more, this should raise some eyebrows.
Of course, factors such as the amount of land and renovations will up the price, but do some investigating before you make an offer. The takeaway: always do your due diligence! Research other homes for sale in the area to see how the one you’re looking at stacks up.
The value doesn’t match the cost of living.
Sometimes house prices start competing with each other, this grows and continues over time, and suddenly you have house prices that are outrageous for the area. For example, a small town in the middle of nowhere where even the shabby-looking 2-bed, 1-bath houses are closer to $300k than to $200k.
In these instances, it’s probably not the homeowner’s fault that their house is overpriced. All the same, it’s something to look out for. If they don’t bite on what feels like a more reasonable offer, you might be better off looking elsewhere.
3 Reasons Why an Overpriced Home Is Bad
- It could be a bad investment. In housing-bubble-crash style, you might have to sell for less than you originally bought it on (lose money on the house).
- Value affects everything. HOA fees, property taxes and closing fees are just some examples of things that will increase with an overpriced home.
- It doesn’t just hurt buyers. Sellers often struggle to sell homes that are overpriced. Even if someone puts an offer in on your overpriced home, the appraisal might not match. The buyer would then either have to come up with the difference or find a different lender.
Avoid Inflated Prices With RealtyHive
Our listings feature highly motivated sellers who are looking for bids, as well as have the discussions that are necessary to sell. Find better transparency with RealtyHive and avoid overpriced homes in the process!