For many people, buying a home is one of the biggest financial decisions they make, but how do you know that prices are fair? Understanding the housing market, estimate the value of its unique features, knowing which tools to use, and asking the right questions can be challenging, but that’s because we’re here. Even if you’re buying your first home in Bellevue, Washington, you’re wondering if a vacation home in Largo, Florida is too expensive. Knowing how to find an overvalued property is essential for both first time buyers and veteran investors.
Key takeout
If it is too long on the market, often relisted, or not sold while it is comparable, the home is often too expensive. Tools like comparable sales, prices per square foot, and online home value estimation can help you assess market value. Real estate agents and valuations can provide guidance when evaluating whether a home is priced accurately.
1. I sat at the market for a while.
A reasonable priced home usually attracts attention and offers within the first few weeks of being listed. Therefore, especially in a highly competitive market, if your home has been sitting in the market for a long period of time, it can be an indicator of high prices. As the property continues to sit, buyers may begin to think that there is something wrong with its high price tag.
In a balanced market, households are usually sold within 30-90 days. In a hot seller market, you can sign a contract in just 1-3 weeks. If you’re not sure if your home has been sitting at the market “for a while,” take a look at the average comparable DOM (days in the market).
2. The house is in and out of the market
A home that has been listed, removed and relisted multiple times may be an indication that the seller is struggling to attract offers or that he doesn’t want to adjust the price. Often, sellers will repost it later without making any meaningful changes, hoping to catch a new buyer by drawing the list after limited interest. However, this strategy can backfire, especially in competitive markets, and buyers may wonder what’s wrong with the home.
To get a clearer image, check the property list history. It could indicate frequent price changes, short list windows, or multiple contracts have failed within the last 3-6 months (or 6-12 months when the market is slow), or that the house is high or there is a fundamental problem.
3. Nearby houses sell, but this is not for sale
This market behavior indicates that other buyers are not willing to pay the listing price. It’s just the cost, or both, whether it’s in the condition of the home. This is especially true when your neighborhood home is selling quickly. This indicates strong demand in the region. In that case, the house is probably desirable and not at current prices.
4. Nearby homes are listed, but not for sale
On the other hand, if some neighbourhood homes are not selling either, this often indicates that prices in the area are too high for current market demand. Sellers may be priced based on outdated data from hotter markets, but buyer demand is cooled. This could be a signal that the expectations for pricing in the neighborhood are all too high.
5. Prices do not match recent sales
Look at the recent selling prices of homes with similar area, features and locations (comparable). If this home is a much higher price without offering any more, it is probably a high price.
Please be particularly careful:
Agents can also help you perform comparative market analysis (CMA) to identify what homes should be worth.
6. Online estimates and ratings show low values
It’s worth noting if the price of a home is significantly higher than what you see in an automated rating model (AVM) like Redfin’s estimate.
You can also ask an agent to get a stadium estimate, or if you are serious about the property, you can consider paying for the valuation. If the rating is low, you can either have leverage to negotiate the price or leave.
7. Home doesn’t match your perception of your values
Even if numbers look ok on paper, the house doesn’t just feel worthwhile. Maybe it requires too much work, has a troublesome layout, or doesn’t appeal to curbs. Values are partially objective, but your personal budget, goals and priorities are also important.
If you’re not used to paying in full, trust your instincts and talk to your agent about your options.
However, if you don’t think the state of the house, location, or feature matches your willingness to pay the listing price, you can consider it too high as the value could be subjective.
What if you think your home is too expensive?
Create a reasonable offer: offer to comp, not list prices. Offer Support: Enhance your cases using DOM data, price history and market conditions. Be prepared to leave: If the seller is not upset, be prepared to move on. A new list will be displayed every day. Rely on agents: A good real estate agent can help you evaluate pricing, negotiate strategically, and avoid overpayment.
High-value household goods: What buyers should know
Why do sellers overpaint their homes?
Several reasons include emotional attachment, overestimation of upgrades, and unrealistic expectations based on past market trends.
How do I bid on a high priced house?
Consider starting with comparable sales, fair offers based on market data and supporting the offer with pre-approval letters. If you are in doubt, work with a real estate agent to further assist you in the bidding process.
How do I make sure I’m not exaggerating my house when it’s on sale?
Research comparable characteristics and consult your real estate agent for a comparable market analysis. You can also use valuation or automated evaluation models (AVMs) to ensure that list prices match the current market.
Do my real estate agent need to review the entire price history of the house?
In short, yes. This review will help you create more informed offers by identifying patterns such as frequent relisting and price changes that can indicate issues and overprices. Include on and off-market cycles for a better view of the facility’s history.
