While you should work with a real estate agent to help you find your new home, it’s important to remember that the agent earns a percentage-based commission on the house you do buy. While most agents are reputable, you should still be prepared to do some of your own research. Knowing the fair market value of a home will help you get more house for your dollar.
Research Recently Sold Homes
You can do a little research by looking at recently sold homes that resemble the home you want to buy. If you’re looking at a 2,400 square foot home with two bedrooms and two baths, look for the same size homes that were recently sold. While the condition of the home and additional amenities may also affect the sale price, the home you want to buy should be priced within the same ballpark.
Look at Other Homes on the Market
You should attend open houses and tours of other homes that are for sale within the same area. This will give you a better understanding of the price ranges for comparable homes. By touring them, you’ll also see what amenities or features are affecting the prices of homes in the area. As you learn more about the market, you’ll gain the expertise to accurately judge home prices in your community.
Be Skeptical of Private Sellers
Many buyers don’t realize they’re overpaying when they buy a home from a private seller. When a seller hires an agent, the price of the home is marked up by about 3% to cover the agent’s commission. A seller who chooses to sell without an agent should mark their asking price down by that 3% to reflect that they’re not paying the commission, but many don’t take that into consideration.
In the end, you’ll have to trust your own instincts. If you think a seller is charging too much for their home, you can and should move on with your search. In many cases, the seller may lower their asking price rather than risk losing the sale. If they hold fast to their original price, keep in mind that there are more homes on the market. It may take a little longer, but you will find your ideal home at a more reasonable sale price.