Planning on buying a new home? Tempted for that grand villa in the neighboring area? Or are you looking for a comfortable, cozy and practical house to live in? Well before you start purchasing a real estate property, you first have to identify if the value of that property is right. There are factors that you have to consider when buying a house: budget, location of the property and its condition. Sometimes a property can be overpriced and cost more than what it’s worth so before you purchase that grand villa better check if it meets the qualification.
According to Real Estate Agents, there are 5 things to identify if a property is overpriced.
- Property cost higher than the other house in the area.
You have to make a comparison on the pricing of the property you’ll purchase vs the prices of the property in the neighborhood. Check why it is more costly than the rest of the houses. Is the price fair and right? Some sellers would overpriced when the property is much bigger than the rest of the neighboring moderate houses. Sometimes its value would drop to accommodate to even out its price with the neighboring houses. So before you buy that Grand villa, check the price of the house next door.
- The Length the Property has been in the market
Ask how long has the property has been in the market. Check when it was listed. The longer the property is in the market would indicate that it is overpriced. Nobody would want to buy a house that is too expensive and its value doesn’t compensate for the features and amenities it possess. If no offers was made then it’s another explanation that the property is overpriced.
- Additional Amenities
If the house has a lot of extra amenities such as swimming pool, tennis court, wet bars, then the property is overpriced. Sellers often make a lot of adjustments, renovations and add amenities and would often go overboard. Then they would sell it at a higher price to compensate the cost of the renovation and installation fees. However this would also indicate that it’s overpriced. The extra amenities should not be a reason to overprice a property. You have to check the value and functionality of that amenity or the added renovation and verify if it’s worth it or not.
- Location of the property
By identifying the location of the property, we can also identify if it costly and overpriced. If the property is near or close proximity to commercial districts, schools, banks, shopping center, hospitals, fire and police stations, would of course cost more than a property which is isolated or away from these establishments. Now if the property is located far from these establishment and it’s pricey, then it is overpriced. When purchasing a property, location is one of the factors we look for. If it’s near hospital or fire stations for emergency reasons. If it’s near a well rated school and near commercial districts. We look for this specifics because it’s a necessity for us. But when a house located in a poor rated schools, low income commercial districts and far from emergency access and it’s still costly then you are being ripped off because the property on sale is overpriced.
- Improvements Made
The last reason why a property can be overpriced is because of the renovations done to it. We do house renovations to improve our lifestyle and the functionality of our house. Renovations can sometimes be costly that’s why sellers would tend to overprice the rate of their house to compensate for the renovation cost. Sometimes it’s worth it, but sometimes it’s not. You need to check if it will bring value to you and to the property.
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How to Identify Overpriced homes by Miller Hobbs Group