Will You Overpay For a Home?

Posted in Buyer Blog | 07/09/2012

Windsor Homes

Windsor Homes

As I have mentioned on this site before, chances are, by not hiring a qualified real estate professional to assist you with your home search, you have a 50% chance of overpaying for a new home.  Scary figures huh?  Who wants to pay more for anything these days, let alone what will probably be the biggest purchase you make in your lifetime?  And if you think you are saving money by buying a home For Sale By Owner (FSBO), think again.

There is a not a buyer around that doesn’t want to get an excellent deal on their home purchase, but if you are even considering a FSBO, it is important that you ask the homeowner how they came up with their list price.  Chances are, they will tell you what homes have sold for in the neighborhood, but they will insist that their home is much better because of the many improvements they have made.  There is not a passionate seller around who doesn’t feel their home is the best one on the block, so owners naturally want to increase the price because better costs more.  The problem is, many inexperienced homebuyers believe it.  Don’t.  A homeowner will then say that they are saving you money because, “there are no realtor fees,” so they are passing along the savings to you in the list price.  Again, chances are the house is overpriced, so what are you really saving?  Nothing.

So what should any homebuyer do?  Get representation by a qualified real estate agent.  Examples I have used in the past, but continue to use to prove a point, is that you wouldn’t let an amateur do surgery on you or a family member would you?  You also wouldn’t consider planning for your retirement without a professional accountant would you?  So why would you attempt to buy a home without a qualified, experienced agent guiding you through the process?  So buyer beware.

Let’s put it this way.  FBSO owners have a pretty good reputation as being very tight with their money.  Besides trying to avoid paying commission, they tend to have an emotional attachment to their property.  By being so personally involved, you will find that negotiations can be summed up in one word:  difficult.  Why?  Because often this process is handled with their hearts, and not their heads.

One other thing to consider: there is a tremendous amount of paperwork involved when purchasing a home.  It is vital that an owner provide you with the most accurate information pertaining to their property.  Make sure, if you are considering a FBSO, that details such as exact square footage or zoning details are included.  Also, full disclosure by a homeowner on any problems with the property or information that a buyer would not normally know, needs to be included.  Again, this is where a real estate agent’s expertise is critical.  If you hire an agent that is well-regarded and considered a neighbourhood specialist, then you, as their client,  will know everything about the neighbourhood and surrounding area.  If a freeway is going up near a rural area you are considering, a real estate agent will tell you.

Windsor Homes

Windsor Homes

So, do your homework before you consider buying FBSO Windsor homes.  While you may not see any red flags when you start the process, chances are, you may see them once you sign the final paperwork.  And by then, it may be too late or at the least cost you much more than you think you saved


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