Whether you’re buying designer jeans or a new house, no one wants to suffer from buyer’s remorse.
There are lots of potential complications that can cause you to overpay for a house, from being caught up in open-house frenzy to skipping a home inspection to “save” yourself money. But just as there are obstacles to getting the best deal, there are also tried-and-true strategies to get a fair price for a home, like getting a private showing of that home for sale in Salem, OR instead of (or in addition to) attending the open house.
Here are four more tips to calculate accurate house value and avoid overpaying for your home.
1. Define “fair price”
Before we get into the nitty-gritty of landing the best deal, it’s fair to point out that sometimes it’s worth paying a bit more if that means you can score a house that perfectly suits your needs. Ask yourself: Is it really worth losing your dream home over a few thousand dollars? It’s a call only you can make, but the answer just might be no.
2. Know the comps
One of the best ways to know the value of a home is to find out what similar homes in the area recently sold for, known as “comps,” or “comparable sales.” Looking at what other homes in the neighborhood are listed for helps too. You usually get the most accurate picture of local home values by looking at the price someone actually paid. “Ideally, you’ll be able to find at least three comparable properties that have sold recently in the same neighborhood,” says Sam Heskel, CEO of Nadlan Valuation, a New York, NY, appraisal company. A real estate agent should be able to track down this information for you.
3. Work with a buyer’s agent
Yes, you can browse listings on Trulia, but don’t let that keep you from hiring a real estate agent. A good agent will know of properties that are about to hit the market (or might sell before the MLS listing goes live!) plus have expansive knowledge of your market, which can be a huge help if they suggest neighborhoods you haven’t considered that are a great fit for your needs.
“In today’s market with tight inventory, almost half of my deals are completed and sold off-market before they even hit the open market,” says Ryan Pertile, a Minneapolis, MN, agent. “So homebuyers need to find and hire a real estate expert in their desired neighborhood.” (At HomeSmart, our agents pride themselves on being true area experts)
Besides providing you with a comparative market analysis, an in-depth look at house values, a rock star agent “knows the current condition of the market and what is a fair price,” says Phillia Kim Downs, a New York, NY, agent. “Based on the length of time the property has been on the market, whether it’s a buyer’s or seller’s market, and whether there’s a bidding war, an agent should be able to guide you effectively with strategy to make sure you get the most bang for your buck.”
4. Comparison-shop for your mortgage
You probably comparison-shop before buying furniture or even gas for your car. But almost half of consumers don’t shop around for their mortgage, according to the Consumer Financial Protection Bureau. And that’s a mistake. Lenders charge different fees, and they offer various interest rates, sometimes varying by half a percent or more. That could affect your payment to the tune of $60 a month.
– See more here