Jeff’s Carlsbad Blog for First Time Home Buyers


How Not to Overpay in This Market

Posted in Housing Market by Jeff Dowler on November 3, 2006

There are some things you can do to get the house you want and NOT overpay while doing so.

  • First, make sure you have a REALTOR assisting you, and have that person represent YOU as a Buyer’s Agent. Otherwise, they work for the seller and cannot advise you on pricing, since their fiduciary responsibility is to the seller, not you.
  • Get to know the market as well as you can by reviewing homes listed on the Internet. Visit Open Houses to get a sense of value in different areas, and for houses of similar style, size, amenities, and condition.
  • Have your Buyer’s Agent provide you with comparables that have sold recently (while it is traditional to look back 6 months this may be too far in this market, especially in some communities if prices have dropped a bit). This will allow you to compare the homes that are similar to the ones you are interested in and see what they sold for.
  • Before making an offer, look not only at the comparables, but have your Buyer’s Agent find out when the house was bought and what the mortgage is. If the house was purchased in the last 2-3 years, the sellers may have bought at the peak and therefore will not reduce their asking price by much – you could overpay in this situation. An exception may be if the sellers paid cash or have a very low mortgage. Also, if they MUST sell, you will have a better chance of paying the market price rather than overpaying. Don’t assume, however, that they will sell for a rock-bottom price – you will probably miss out on the house you want.

Keep in mind, however, that buying a home is a long-term investment. Even if the prices drop 1%, for example, over the long-term they will rise and you will still make money on your investment, as well as have the tax advantages. Don’t miss out on the house of your dreams for a few thousand dollars – this translates into only a few dollars more in your monthly payment.

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2 Responses to 'How Not to Overpay in This Market'

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  1. […] Congratulations! You have spent lots of time looking and thinking, and now you are ready for that BIG STEP – making the offer! It’s kinda scary…but if you have done your homework, and followed my suggestions along the way, you are in great shape. […]


  2. […] are ready for that BIG STEP – making the offer! It’s kinda scary…but if you have done your homework, and followed my suggestions along the way, you are in great […]


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