When buying a home, it’s essential to understand the market value. A realtor can help you negotiate the price, but there are certain things you won’t be able to avoid. You’ll be required to pay property taxes, for example, and you’ll likely have to pay title insurance and inspection fees. While these costs are part of the home-buying process, many new homeowners make mistakes when determining how much their home is worth. Fortunately, if you know what signs to look for as early warning signs of overpaying for your home, you can save yourself from making a costly mistake.
1- Your Real Estate Agent is Hesitant to Negotiate the Price
If you work with a realtor who seems hesitant to negotiate the price, that’s a clear sign you’re paying too much. Most realtors will help you argue for a lower price, but they’re more likely to do so if you’re paying less than the asking price. If you’re overpaying for your home, your realtor might be hesitant to negotiate the price for fear of offending the Seller.
2- You’re Paying for Cosmetic Upgrades
Many home sellers will add on a few upgrades before putting their house on the market. You may find new appliances, hardwood floors, granite countertops, or even an updated bathroom or kitchen. While it’s great to have these upgrades, they don’t add any real value to your home. If you’re getting ready to offer a house with cosmetic upgrades, make sure you factor that into your offer. You must not pay for upgrades from which you’re not getting any real value. Be sure to communicate with your realtor that you’re only including the cost of the advancements in your offer.
3- You Can’t Get an Answer From the Seller
If you’ve made an offer on the house and the Seller remains silent, that’s a huge red flag. If they don’t respond to your request, they might not be interested in selling the house. If they don’t respond to your offer within a few days, take that as a sign that you’re probably paying too much for the home.
4- There are Unanswered Questions in the Inspection Report
A home inspection can tell you almost everything you need to know about a house. There might be some issues with the roof or the foundation, but you’ll know exactly what they are. If there are unanswered questions in the inspection report, you might be paying too much for the house. With a standard inspection, the inspector is supposed to check everything you can see.
5- You Feel Pressured by your Realtor or Loan Officer
Realtors and loan officers are there to help you buy the home of your dreams, but they don’t want to be pushy. If you feel like they’re pressuring you to buy a house you’re not 100% sure about, you may be paying too much for the home.
6- You Don’t Have a Good Feeling About the Seller
If you feel wrong about the Seller, you might be paying too much for the home. If you feel uneasy around the Seller, you might want to walk away from the deal. You don’t want to be in a situation where you’re afraid to ask questions because you’re afraid of offending the Seller.
7- The Mortgage Company is Shrugging Off Your Concerns
Mortgage companies have minimum standards for title insurance. They may require you to purchase a policy that covers all potential problems in the title. They’re not necessarily trying to put you on a budget with that requirement, but if your policy isn’t enough to cover the problems in the title, you’ll have to pay out of pocket. If you’re finding issues you know are covered by the title insurance, but the mortgage company isn’t concerned about them, you might be paying too much for the home.
It is advisable to enter a deal where you feel confident about the homeowner and the terms of sale to avoid paying too much over a home value.