How to Avoid Overpaying for a House
The housing market has been so hot that some buyers are feeling regret. According to one report, almost 40 percent of recent home buyers felt that they overpaid. Ouch! In such a heated environment, it can be tempting to simply pay as much as possible for the home you want. But, it doesn’t have to be that way. Here are some ways to avoid spending too much on a home.
Don’t Assume a Bidding War
Just because the market is hot doesn’t mean the house you want will receive a slew of offers. In fact, in May, only 58 percent of under-contract homes had received multiple offers. That’s the lowest percentage in more than a year. Instead of assuming a bidding war will erupt, find out as much as you can about the property itself and the local market. This info will allow you to make a competitive offer that won’t be tainted by possibly non-existent competition.
Don’t Go First
You might love the first home you see, but try to resist the urge to make a move on it. Instead, take your time and look at a few options. You want to find a home that fits your needs, not simply a home that is for sale.
As with the bidding war, don’t assume you have to come out with a sky-high first offer for a home. As Money notes, more sellers are lowering their prices. From mid-May to mid-June, 22 percent of homes had a price drop — the highest since 2015. Instead of making an offer way over the asking price, consider an escalation clause. This lets the buyer know you’d like to pay roughly the asking price, but will increase your offer (to a certain point) to match other offers if need be. In order to avoid overpaying for a home, proceed with caution and think the matter through. Patience can be your greatest asset.
Content by Savvy Money