Overpaying On a House Is So Un-necessary; Here’s How You Can Buy a Great Home, Without Emptying Your Entire Bank Account

When looking to purchase a home, what really matters is knowing how to avoid overpaying for it. Below are some tips that you should absolutely follow, so that you can avoid the mistake that many buyers make, of paying more for a house than it’s actually even worth.  Heritage-Collection-Tumblr

The very first, is to know how much you can actually afford to spend. Unless you are paying all-cash (unlikely) and don’t have to borrow any of the home’s purchase price (again, unlikely), you’re going to need to get a mortgage. This means you’ll have to be approved by a bank. The pre approval needs to be in writing, with contingencies stated clearly and in detail. Many times the bank wants an appraisal, job verification, and your credit. Among many other things. See: How to Avoid Overpaying in a Real Estate Bidding War.

Don’t rush the process. Realtors are known for trying to kind of force someone to buy quickly, even if they aren’t quite ready. Because of this, many people have either bought homes they didn’t necessarily want, or paid way too much from them. Read: Know Your House Value and Avoid Overpaying. Realtors are on your side, but remember, they live on commission. They want to make as much money as they can, and that depends on two factors: IF you buy a home, and for how much. Do some of your own homework on the houses they show you.

Ask the seller why they are selling the house. You should always do this before putting in an offer on a home. While the buyer’s real estate agent might not know the reason, they can generally always find out just by calling the listing agent. Many agents aren’t even in the loop on why the seller is actually selling. You must know why they are selling it; if you don’t know the reasons for their motivation, you won’t be able to properly negotiate the deal to your advantage (or if that’s even possible). 0ab828b

Never be the ‘nicest house on the block.’ This has been said time and time again, yet people continue to make this mistake. If your dream home is smack in the middle of the projects, do yourself a favor and walk away. Likewise, if you do remodeling to a home, don’t ever upgrade it to be nicer than the others. You should always renovate or remodel only if you are trying to keep up with the other homes. You never want to be the nicest. Always make the largest decision in terms of buying a home, have to do with the location. Lastly, you should check the neighborhood and market ‘comps’ by yourself, and then talk to your agent. That way, you can let he or she know of what you saw, and compare notes. You don’t want to lose money when you sell. See: Home Value Estimator.

2 comments

  • Beth

    What if the house I found is the best one I’ve seen so far? I know its overpriced, but I am in love with it, and it’s in a great location.

    Reply
  • webmaster

    Hi Beth! That is up to you. At least you know you will be overpaying. If you are fine with it and love the house, go right ahead. Just be aware it will likely be tough to get paid what you pay unless the market changes, and the neighborhood rises in value by the time you decide to move (if you do).

    Reply

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