• Don’t Make The Common Mistake Of Overpaying For a House. Here’s How To Get Your Dream Home For What It’s Actually Worth, And Not a Dime More

    Qualified buyers have the upper hand not only with sellers but also with real estate agents, mortgage lenders, and even contractors who can bring a house up to snuff. Here are four tips for turning the housing downturn to your advantage:

    The best way to get a great deal on a house is to come armed with a significant amount of data showing that you’ve done your homework and know what the place is worth. Thankfully, information on everything, from what comparable houses have sold for to what exactly has been remodeled, and when, is pretty much at your fingertips, through commercial sites, as well as via government databases. See: 5 Things I Wish I Had Known Before I Bought a House.

    Such data is especially useful when making an offer on a foreclosed home that’s been repossessed by a bank, where you won’t have to deal with touchy issues like a seller’s sentimental attachments to his home. Don’t ever try to low-ball the bank…instead, gather the statistics, and make your case that yours is a fair price, they’re more likely to take it.

    Be sure to negotiate! This is extremely important. You never want to pay more for a house than you actually have to. If you’re working with a real estate broker, start there. Traditionally, the agent representing the buyer splits the commission with the agent representing the seller. Buyer’s agents are fond of telling their clients that their services are “free” because the seller is the one paying the commission. But the seller wouldn’t be willing to lower his price if the agent was willing to lower his commission by an equal amount. 

    Always choose a great location, no matter how inexpensive a property might seem. Just because you’re getting it at a “good deal,” it isn’t really a deal if it’s in a horrible area, or near an airport or highway, for example. Read: How Much House Can I Afford?

    While houses near great schools or within a few blocks of public transportation almost always sell at a premium to the overall market, they tend to hold their value in down markets and rise more quickly in good ones. Indeed, while it may seem that it’s the house you’re investing in, it’s actually the land underneath it that appreciates. That’s why some of the best deals to be had may be the worst houses on the best blocks, especially in areas where demographic trends remain strong.

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    2 thoughts on “Don’t Make The Common Mistake Of Overpaying For a House. Here’s How To Get Your Dream Home For What It’s Actually Worth, And Not a Dime More

    • Erin says:

      My realtor doesn’t seem to be great at negotiating. One of the homes we found, she wasn’t able to negotiate much at all on.

    • Betty Brown says:

      Hi Erin. In that situation, perhaps the seller wasn’t willing to be flexible on the price. If you have noticed a pattern of poor negotiation skills, you may want to consider a different real estate agent.

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