When It Makes Sense To View Homes Above Your Budget
Posted on: 10 January 2017
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When purchasing a house, it is typically advised that you don't look at homes above your budget. The last thing that you want is to fall in love with a house that you can't actually pay for. But there are a few situations where looking at homes above your price point may work to your advantage, such as:
The Home You're Interested In Is Overpriced
Most seller's agents try to get their clients to price their home accordingly when they put it on the market, but sometimes homeowners have an inflated idea of what their home is actually worth. If you see a home in an area that you're interested in that seems more expensive than other similar homes for sale, ask your real estate agent to check the comps. Comparable homes that were recently sold will show the actual market price of the house, and you can make an offer below listing price. Best case scenario, the seller's real estate agent will convince him or her that it is a good, fair offer and it will be accepted.
Your Area Is Currently a Buyer's Market
The real estate market is continually changing-- sometimes sellers will have more power and then conditions will shift and buyers will have more leverage. If you're interested in looking at homes slightly above your price point, make sure you do so when your area is considered a buyer's market. This means that the inventory of homes for sale exceeds the number of current buyers. In this situation, a seller may be willing to accept a lower price just to avoid having their home sit on the market for weeks or months.
The Seller Is Motivated
In some circumstances, people need to sell their homes quickly and their main focus is not on getting the highest price possible for their house. Needing to move to another state, divorce, or the death of the homeowner are all situations that can create very motivated sellers. These sellers often need to get rid of their houses fast, and may consider selling for below market value.
The term "motivated sellers" may be mentioned in a home's listing, but you should also turn to your real estate agent for assistance, as they often hear news about sellers who want to sell quickly. With that being said, be realistic-- you most likely will not be able to purchase a mansion for the price of a starter home just because the sellers are motivated to sell.