How do you know if a home is overpriced?
Overpriced home prices are so last year. Like every trend, though, you can easily find a handful still hanging out on the market — but only if you know what to look for.
Let me show you how I spot inflated home prices for my buyers so that you can feel great about the house you’re getting and the price you’re paying.
1) Get cozy with a Comparative Market Analysis (CMA).
A CMA is THE best way to determine a house's fair market value. Put together by a knowledgeable agent, it’ll compare recent sales of similar properties nearby to paint a picture of what homes are currently selling for. Keyword here? Currently.
2) Check the time on the market.
A property that’s been sitting on the market for a while may indicate an inflated price. Well-priced ones attract interest — and sell — quickly. (FYI: the average days on market in June 2023 was 44.)
3) Appraisal vs. listing price.
You’ll be well into the buying process before the appraisal comes back, but it’s critical in confirming a property's value. If the appraisal comes in lower than the listed price, it's a serious red flag.
4) It’s what’s on the inside that counts.
Does the home boast a shiny, new kitchen, or is it stuck in the 90s? Interior and exterior upgrades can add or subtract from a home’s value. If things don’t add up, it’s time to ask some questions.
5) There’s no crying in pricing (or, at least, there shouldn't be).
Sometimes, sellers get attached to their homes, leading to “emotional pricing” - pricing based on data AND sentimental value. Have compassion, but negotiate with your CMA in hand to avoid paying more than you should.
Wondering if you can afford a home in our market?
Get in touch. National numbers are a great measuring stick to see how the overall economy and housing market are doing, but they don’t account for local home values and your personal financial situation.