7 min read.
Buying a house becomes a daunting experience for many reasons. The big one is the price which dictates how much you’ll pay off on your mortgage which could be for decades to come.
There’s also that initial dread or fear that you may end up paying too much for the house you’re about to bid on. So what’s one of the best ways to protect yourself from disappointment?
The answer lies in looking out for signs that you’re overpaying. Ask anyone with experience in the real estate industry and they’ll tell you that there are obvious signs you can look out for that show you may be overpaying on a house.
Luckily thanks to the real estate market going online, things are becoming more transparent.
6 Signs You’re Overpaying on a House
You don’t always need to rely on a real estate agent or seller to tell you if you’re getting a fair price.
You can find this information from independent sources such as a local buyers agent or even the housing market stats you find on a website like realestate.com. But with all this information available, how are people still overpaying for properties today?
Sometimes paying too much for a house comes down to the experience of the buyer. The latest numbers for property sales across Australia show that first-time buyers tend to pay more for their properties. If you’re looking to avoid overpaying for your next property like many first home buyers, then read on.
We’ll be covering just five of the most obvious signs you’re paying too much for a property.
The listing price is higher than other houses nearby
When you’ve got your heart set on one house, it still helps to look at others in the same suburb. How much are other houses with the same amount of bedrooms and bathrooms listed for?
Making these comparisons can help you figure out if your favourite is overpriced. Keep in mind that maybe your particular house is overpriced because it’s a private sale. Other houses in the area for sale may have a lowered price to attract more buyers on auction day.
When comparing house prices in one area don’t just look for ones that are up for sale. Consider comparing those which have recently sold within the last month.
While making these comparisons it’s also important to observe trends. There are certain times of the year when the market is slow and there’s less competition. So you may want to think twice about comparing two houses when one of them wasn’t available during a peak time like spring or summer here in Australia.
The house has been on the market for a long time
If a house has been on the market for a long time there’s probably a good reason for it. One of them could be the fact that it’s overpriced.
A seller could have been too ambitious from the start and has decided not to change their mind on pricing. In some cases, it just may have gone up at the wrong time. If the property hasn’t been listed during a peak time for home buyers then maybe it will fare better during the warmer months of the year.
But don’t let a big price put you off. Sometimes simply enquiring about an overpriced house can give you a foot in the door.
After you enquire about a property, the seller may be willing to negotiate a lower price. This could happen especially if they have had the house on the market for too long and are looking for a fast and easy solution for selling. This is called a motivated seller.
Hidden maintenance or structural problems
Have you found a low-priced house that seems too good to be true?
Always lookout for warning signs like maintenance and foundational issues. A real estate agent may neglect to show you these issues so you don’t get discouraged from submitting an offer.
There are many properties out there that may have been ex-rentals. Rental properties are notorious for having the bare minimum done when it comes to maintenance. This results in years of neglect or patches up jobs to make the house pass the absolute minimum standards to be liveable.
So while you may find a cheaper house in a suburb, look closer for any maintenance issues that may need to be fixed after you buy it.
Look at all the essentials like roofing, electrical wiring, the switchboard, hot water system and heater. If any one of these items is faulty they can cost you thousands of dollars to repair or replace.
Overpaying for the convenience
Property buying should never be done in a rush. With an absence of time, it’s hard to take a step back and take everything in.
It’s only in hindsight that you realise you could have waited just that little bit longer to find a house with better features and a lower price. Many home buyers end up overpaying for a house simply because they’re in too much of a rush.
To avoid overpaying for a house it’s always best to have time on your side. You owe it to yourself to spend more time researching the local market and going out to all those house inspections to see properties in person.
If you’re really time-poor and don’t have a choice then consider hiring a professional for support. A Buyer’s Agent is one professional whose job is to do all the property inspections and research for you. Even in a short amount of time, a Buyer’s Agent can locate ideal homes that are well within your specifications and budget.
Delayed updates to the suburb’s amenities
More often than not you can end up buying a house in a suburb that doesn’t live up to the hype around it.
This is very common with house and land packages purchased in new housing estates. On all the marketing and advertising for the housing estate, you’re promised easy access to local amenities like public transport, schools, freeways, and shopping hubs. But when these amenities are established is a completely different story.
When you pay for a new house you’re expecting a lot of the suburb amenities to be there when you move in.
These suburb amenities are what adds to the value of the property. So when they’re not there, it’s a clear sign you’ve paid too much for the property in question. It’s very common for building projects such as freeways, train stations and other amenities to be delayed by years or decades if they haven’t been scrapped altogether.
Never overpay for a house again with the right advice
If you’re concerned about paying too much for a house there are measures you can take. One of the best things you can do is spend more time researching properties in your local area.
Apply the right amount of time and attention to detail when it comes to inspecting houses. There is nothing wrong with doing multiple inspections on the same house. Property purchases are one of the biggest investments you’ll ever make in your life and it certainly pays to get it right.
Another great way to protect yourself during a property purchase is to get professional assistance. A Buyer’s Agent is a dedicated real estate professional who can research and inspect properties for you. With their in-depth knowledge and years of experience, they can help you avoid paying too much for a property.
Learn more about the process of using a Buyer’s Agent before you take the big leap on bidding for a house. It just might save you thousands in home mortgage repayments for the rest of your life.