Overpriced listings cause problems for everyone - sellers, buyers, Realtors and appraisers. The reasons that sellers over-estimate the value of their homes are varied, but one thing's for sure, no buyer wants to overpay for a home.
So what should you do when your browsing homes online, how do you know if a listing is overpriced or not? Well, here's my advice to you:
"If you're thinking about buying a home you're probably going to start your home search online, and when you do that, I would highly recommend you try to be as focused as possible. I tell people searching in about $20,000 price chunks is probably a good way to go. So if you're thinking maybe $200,000 is your max, maybe you want to search from $180,000-$200,000, or if it was $150,000, maybe from $130,000-$150,000, because you want to be comparing those properties against each other so that you learn which ones are really good deals and which ones are overpriced, as well.
The ones that are really good deals, I think it's pretty obvious how you should approach those, you should go see them quickly and you'll probably want to offer close to list price because they are going to be appealing to everybody.
However, if you’re unfocused in your home search, and let’s say one pops up that's out of your reach, out of your price range, but you love it - I've got bad news; the seller is probably not going to reduce their list price that much so that you can get the home.
That's the problem with overpriced listings. They're overpriced for a couple of very different reasons. Maybe number one, they've done many improvements to the property that they want to make their money back. Maybe they’ve done new countertops, cabinets, and flooring, and maybe that’s justified in some cases. Just realize that you're going to pay more for that property.
But how about the ones that appear overpriced and you don't really know what you're getting for that price? Probably what's going on there is that the seller owes too much on the home to price at market value, and rather than do a short sale and trying to get the bank to forgive that difference, they're just going to price it high and wait for buyers to overpay.
So, I would say I would avoid those houses I would be real focused on your home search and try to look for the houses that are very appealing and reasonably priced, because I pull stats, across the city, Albuquerque, Rio Rancho, the East Mountains all the time, and it looks like most sellers are willing to take off of list price 3% or 4% across the board. I really see sellers taking less than that. What they will have to do over time is make a price reduction once or twice until they the magical range were their property is appealing and is very, what I like to tell my clients, that the property offerable.
So remember it's fun to look at all kinds of houses online, but you really want to be focused on neighborhood and price range so that you understand exactly how much your money can buy."
By Albuquerque Real Estate Agent Rich Cederberg, eXp Realty (505) 803-5012.