How to Identify Overpriced Homes

As potential homeowners look for a new house, many might not even know that they’re paying way too much for that home. Many people are trying to buy homes since interest rates are still fairly low, but the problem is that there are not a lot of houses available. However, some homebuyers will pay anything to have their dream home.

There are some buyers who know the price they want a house for and won’t budge.  For these buyers, sellers still need to be sure that they’ve priced their home competitively since overpricing can be a big mistake. A home can sit on the market for months with no interest. Homes that are overpriced often end up being “price reduced” offerings, getting back to below what the seller anticipated.

Regardless of the market, competitively priced homes will sell faster. It is these homes that are getting multiple offers, with many of them above the listing price. To tell if a home is overpriced, it is good to know what other homes that are similar sell for. This is crucial for seeing if it is overpriced or priced accordingly to comparable houses. This will take a bit of research.

Also, be sure to look at how long it has been on the market. When homes sit on the market for too long, this can be an indication that they’re overpriced. It is wise to listen to the advice of your real estate agent to see if the house that has been sitting is indeed overpriced or not (as opposed to just not favorable by buyers).

If you do see that a house you like is overpriced, you should ask why. Maybe it has customized or unique amenities that make it appraise for more. It might have an elaborate pool or tennis court, which makes it appear overpriced on the market.

You should also research the current real estate market since the economy has a lot to do with a home’s selling price. Usually, low unemployment, job creation, and low inventory of homes, will create markets of higher priced homes. Keep in mind where the home is located as well.

Finally, if the home has improvements like a new kitchen, bathroom, or other additions, then the house might be priced higher than others similar to it because of the updates. Minor home improvements don’t apply, so be aware of this.

In some cases, an overpriced home will sell if frantic buyers genuinely want the home and don’t care about its price. Sellers need to keep in mind that overpriced homes eliminate some buyers that know the house shouldn’t cost that much. The best thing to do is to price it at its most competitive price and just wait for offers.