5 Signs That You’re Overpaying For A Property

Are you looking for a house in San Antonio?

We are well aware that buying a house is an emotional decision for many. And moving to a new house is the most thrilling experience. So finally, after viewing several properties, when you find a perfect key to your dream house, do not get carried away. In your excitement just do not pay the price the seller is asking for. Carefully weigh each option, do thorough research and consult your best advisor the top realtors in San Antonio before making the final decision of buying a house.

But sometimes even after doing proper research, statistics show that every 1 out of 3 buyers ends up paying a higher price for a property. This is basically due to the changing market conditions and also manipulative tactics followed by the seller for artificially driving up the house prices.

In the current pandemic situation, the demand for houses is higher than the supply. Thus, it has lead to a big jump in house prices.

So be cautious and be well aware of all the blind spots that you may encounter on your house buying journey.

The following 5 signs indicate that you are overpaying for a property and need your quick attention.

1. The house is collecting dust on the market:

Do not buy a house without finding out the number of days it has been listed on the market. Generally, a house is considered to be stale if it lingers in the market for more than 90 days.

There are many reasons for a listing to go stale such as bad economy, cold market condition, problems with the house, or a lousy house showing job by the seller. But the No. 1 reason for a house to linger in the market is that a stubborn seller, having unrealistic expectations has simply overpriced it. San Antonio real estate agent is well aware of all the listings and will tell you exactly how long the house is lingering in the market.

2. Compare the price with other houses in the locality:

As a buyer, you only pay attention to the estimated value of other similar houses in the area. But to ascertain that you are not paying a higher price for the house, comparing its price with other recently sold houses in that area is important. Before finalizing the deal ask your real estate agent in San Antonio to verify whether the price you are paying is at par with the prices of recently sold houses.

3. Conduct due diligence:

If the find value of the house is similar to the value of other recently sold houses in the area, it is not necessary that the house is not overpriced. The simple reason is that there may be expensive maintenance issues associated with the house. Also, as the saying goes “small leaks sink big ships” becomes quite true when hidden damages or badly-build foundations may end up costing you thousands of dollars in near future.

So before placing an offer on a home make sure to do a complete check and survey. Hire an experienced inspector who will give you a clear picture of what repairs and maintenance will be needed in the coming years. This will give you an exact idea of the expenses that you may have to incur shortly.

4. Investigate the location:

Location matters the most. The value of a house will appreciate in the future only if it is located in a good and prosperous location. It is the land value that appreciates and not the house.

The house suffers wear and tear and depreciates over time. So if the house value does not even appreciate by 10% in the next ten years then it is indeed an over-priced house. Thus, buying a small and old house in a great neighborhood is more worthy than a well-furnished, spacious, and well-built house located in an undesirable area.

Evaluate the features of the area and analyze the growth opportunities. Buy a house in an area having high-rated schools, amenities such as parks, popular public places, and easy access to mass transit.

5. Include an appraisal contingency clause in your contract:

A house deal is finalized when your offer is accepted by the seller and the contract is signed by both parties. But before making the final payment it is necessary to conduct an appraisal. So make sure to include an appraisal contingency clause in the contract.

Hire an appraiser who will give you an estimate for what the house is worth. This information is also required by a bank or any lender before approving the loan amount for the house. The bank will not lend you more than what the house is worth.

According to the appraisal contingency clause, the house appraisal amount should come around 5% to 10% of the finalized amount. But if the appraised amount is drastically less than the finalized amount then the house is overpriced and you can negotiate with the seller.

Bottom line:

So buy your dream house with your head and not your heart. Falling in love with a place and the urge of owning it at any price is indeed a foolish idea. Also, avoid bidding wars as you usually fall into a trap and end up overpaying. Buying a house involves emotion. So act wisely.

Keep in mind the above factors and consult a real estate agent in San Antonio to help you in your journey of house hunting in San Antonio. Top realtors in San Antonio will guide you in choosing the right house or if you wish to buy condos for sale at the best price.