Wednesday, February 21, 2007

Triangle Home Buyers BEWARE of paying too much for a home

Triangle Relocating Home Buyers BEWARE: Do not pay too much just because it looks like a good deal in the market from which you are moving.

I will preface this posting as strictly an individual Exclusive Buyer’s Agent’s opinion. This opinion is based upon no scientific studies or statistics just recent experience in the local housing market.

A disturbing trend seems to be developing in the Triangle home market. As many newcomers are merging on the Triangle, homes that are being listed thousands of $$$ above the comparable sales in the neighborhoods are being sold near or at the listed price. I cannot understand why anyone would want to pay so much above the market value of the property if they had been informed of the risk they may be taking should the market take a down turn.

There are only 2 explanations I can think of for paying too much for a home.
1- Buyers relocating from markets like the DC area, Massachusetts, California, etc. see homes in our market and think it is a fabulous deal. Yes, in their market maybe it would be, but in the Triangle market it is overpriced. Their Real Estate Agent should be advising them about the fair price for the property and not letting them pay too much for the property.

2- First time Buyers or inexperienced home buyers who have not studied the housing market and are not being advised by their Real Estate Agent of the comparable sales and advised of a fair market price for the property.

How to avoid paying too much:

Ask for the most recent (no more than 6 months back) comparison sales in the neighborhood you are considering. Compare cost per square foot, days on the market, and deduct any financial concessions (closing costs paid by seller) from the sales price. Your Real Estate Agent should provide this information without you having to ask as part of their service to you, the Buyer. They should also tell you what they think is a fair market value for the home you are considering.

It is not wise to pay more than the most expensive home in the neighborhood. It is also not wise to own the most expensive home in the neighborhood. Should you have to sell in a short period of time (less than 3-5 years) you could lose money. It also restricts you from making additions and upgrades because that would drive your value out of the range of the neighborhood and make it very difficult to recoup your investment.

Know for whom your Real Estate Agent is really working. If they work for the same company who has the home listed, they will be a “DUAL” Agent and will not be able to provide the above information.

Of course, as an Exclusive Buyer Agency, FOR HomeBUYERS, Inc. believes you should have an Exclusive Buyer’s Real Estate Agent working for you and all of the above information would be provided as part of our 100% Buyer Representation Service.

If you are a Relocating or an inexperienced home buyer, you don’t have to pay too much for your new home. Don’t get excited about the home because it seems like a good deal. Get the comparables and get the facts!