Posted on: 16 December 2019
One of the hardest parts of buying a single-family home is knowing how much you should pay for the house you choose. You can base the amount you pay on the asking price of the house, but is the asking price really accurate? If you hope to not overspend by paying more than a house is worth, here are some signs to watch for that may help you know that you are paying too much for a house.
The home has a high DOM
DOM in real estate stands for days on the market, so when you see a listing, look for the DOM. Almost every listing will have one of these. If the DOM is up to a high number, such as 200, you might want to question the price of the home. A DOM of 200 means that the seller listed the house 200 days ago. In some cases, sellers will remove their listings and then re-list as a way of getting the DOM back down to zero. Because this happens, you should read through the listing information carefully as it will likely tell you all the listing information from the past years. From this information, you can tell how long it has really been up for sale.
Other homes in the neighborhood are priced lower
Another sign you should be aware of involves the prices of other homes in the neighborhood. If you look at the prices of other homes nearby, where do they stand? Do these other homes appear to have lower prices in general? What about the price per square foot? If the home you are viewing seems to have a much higher price than these other houses, then it might be overpriced.
The appraisal tells you that the home is worth less than you are paying
The first two signs are things you can see before making an offer, but this is a sign you will see after making the offer. After the offer, you will have to get an appraisal completed on the home. If you discover through this that the home is worth less than you offered to pay, you might want to back out of the deal as this is a sign you are paying too much.
If you keep these signs in mind as you shop for a house, you should have no problem finding a house you like and paying the right price for it. Always hire a real estate agent for help, too, as your agent can help you learn more about house prices.Share