There’s no denying the excitement associated with buying a house. At the same time, it’s one of the biggest purchases you’ll ever make. For that reason, you can’t afford to make any mistakes — especially when it comes to what you pay.
Fortunately, there are several strategies you can use to avoid overpaying for your next home. Here are five to get you started.
1. Review comps
Before you place an offer on a home, you must first review local comps to see what other properties recently sold for. This is one of the best ways to ensure that your offer is in line with the local market. While you can do some research online (see below), you’ll want to get the guidance of a real estate agent.
2. Dig up information online
There are more online resources available today than ever before. You can dig up real estate-related information such as homes for sale, recent sales, tax history, and more. It only takes a few minutes to kickstart your search. From there, you can dig and dig until you find all of the data you need.
3. Lean on your real estate agent
There’s no excuse to tackle the home buying process on your own. Lean on a local real estate agent to answer your questions, provide guidance, and show you homes that suit your requirements. This person can also ensure that you don’t overpay for the home that you want to buy.
4. Include an appraisal contingency
With this, you have the option to escape the contract, without penalty, if the home does not appraise for the value noted. You don’t have to include an appraisal contingency, but your real estate agent can help you understand the benefits of doing so.
5. Avoid a bidding war
A bidding war is one of the easiest ways to let your emotions get the best of you. Even if you’re okay with the idea of overpaying by a little bit, a bidding war is never a good idea. You can quickly push your buying price well past what you’re truly willing to pay.
Tip: if you’re going to bid against other buyers, set a ceiling and stick to it. This is the best way to avoid a mistake that you may regret in the future.
There’s no right or wrong way to buy a home. The only thing that matters is that you get what you want, at a price you can afford, and without overpaying. Use the five strategies above to ensure that you spend your money wisely.