All About Greenville SC Real Estate

How to Identify an Overpriced Home for Sale

When you're shopping for a home, you'll likely set a price maximum. This filters out the lovely homes that are simply more than you can afford. However, that doesn't stop overpriced homes from coming across your feed. Here are some telltale signs that a home is overpriced so that you can identify a good deal from a bad one.

Calculate the Price Per Square Foot

One way to find out if a home is overpriced is to calculate its price per square foot. You can often obtain this information from a real estate listing or the county auditor's website. Determine this information for the home you like. You can compare it against the homes in the neighborhood that have recently sold. If a home for sale is priced at $200 per square foot, and the average selling price per square foot for homes in the same zip code with the same general features is $150, the house is overpriced.

Ask a Real Estate Agent

Most homebuyers work with a real estate agent. A real estate agent has access to more information about the homes for sale and recently sold homes in the area where they work. They can run a comparison for you with listing prices, offers and selling prices for homes similar to one you think might be overpriced. Those data points provide you with accurate information about the price ranges of houses that have recently sold. The real estate jargon for this information is "comps."

Caveats to Home Pricing

A new home or one built within the past five years is likely to be priced higher than a home that is a few decades old. This is because newer homes also have newer electrical, plumbing, roof and mechanical systems. They also have newer appliances. Many new homes have modern amenities, such as quartz countertops or garden tubs, that increase their value. An older home might need a lot of updates. If an older home is priced low, it might be in dire need of an electrical upgrade, foundation repairs, more insulation, a new furnace or a new roof. The higher-priced homes may have already been repaired and updated.

Hire an Appraiser

If you find a home that you love but you think it's overpriced, hire an appraiser. You will need an appraisal for a mortgage anyway, so hiring a professional to calculate the value of the home is a key step in the purchasing process. The appraiser will consider the home's age, condition, building materials, features, amenities and square footage. Most counties have their own appraisers for tax purposes, so you could also use that information if you're not prepared to hire a private appraiser. Keep in mind that a seller could hire their own appraiser to counter your claim of the home's value. Your lender will use its own appraiser as a part of the mortgage underwriting process.