All homebuyers have one thing in common – it is they do not want to get ripped off. Whatever the state of the housing market, but especially if it is frothy, it is essential to make sure you get the right price. How do you know that you are getting a fair deal, even when the market is tight?
1. Check recently sold properties
A comparable property is one that is a similar size, condition, neighborhood, and amenities to the one you are buying. With that having said, you also gain valuable information by looking at how the property you are interested in compares at a price to different houses. Your real estate agent is the best source of accurate, up to date information of comparable properties.
2. Similar features on the market
In this case, you can visit other homes and get a real sense of how their size, condition, and amenities compare the property you are considering. You can then compare prices and see what seems fair and reasonable sellers know that they must price their properties similarly to market comparable if they want to be competitive.
3. Look at the unsold relative
If the house you are eyeing is priced similarly to homes taken off the market because they did not sell, the house might be overpriced. If there are many similar properties on the market, prices should be lower, especially if those properties are vacant.
4. Market conditions, appreciation
In sellers’ market, features will likely be somewhat overpriced, and in a buyer’s market, properties are apt to be underpriced. It all depends on the current market sits on the real estate boom-and-bust curve. Even in the seller’s market properties can be overpriced even in a buyer’s market if prices have only recently begun to decline. It can be challenging to determine the peaks and valleys until they are history.
5. Does the price feel fair
If you are not happy with the property, the price will never seem reasonable, even if you get a bargain. Also if you pay a little over market value for a home you love, you won’t care in the end.
The bottom line is, when you are shopping for a home, it is essential to understand how homes are priced, so you can make a sound investment and reach a fair agreement with the seller. Using the tips above, you will be able to make a confident and well-informed offer on and home and in any market.