Tony Scarpero

Tony Scarpero likes a comment on an ideabook

How to Avoid Paying Too Much for a House

Use the power of comps to gauge a home’s affordability and submit the right bid Full Story
     Comment   August 27, 2014
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Catherine Gibson
The best way to think of comps and to view them from an apples to apples perspective. You want to calculate the per foot comparable cost. Even if there is a pool in the backyard or other exterior nice to haves, start out looking at the per foot cost, then add in or remove for plusses and minuses and extras.

And calculate the time on the market, watching out for a home that has been pulled off the market and then relisted later. That often means that the sellers are either difficult, have way overestimated the price of the house, or there is a very serious problem that is coming up when the house is inspected. None of these need to be deal killers, just that when you present your offer, if might help to have your agent let their agent know that your numbers are firm, you know how long the house has actually been on the market and that they may need to have a frank talk with the sellers. This also may mean that the sellers will need to adjust their price. They may not like it but what someone is willing to pay is what the house is worth, not the other way around.

Don't get caught up in a bidding war or bath and forth negotiating. There are usually more houses out there. You have the money and your position, to walk away, is one that you should be able to exercise. Set a firm ceiling on how high you can go and stick to it! It's easy to fall in love with a place, but, you need to be really honest about what is, essentially, a thing. Sure it's a large very expensive thing, but if you get too romantic and dewy eyed about a house and lose sight of the core things it needs to be, then you wind up on that love it or list it show with a fundamentally bad fit. Ain't no amount of lipstick can fix some pigs.

And, really take a look at why you want to buy and if you really should remain a renter. In a lot of markets, and for a lot of buyers, renting actually makes more sense. Don't let people tell you that you "should" be buying, just because you can afford it. Think you might move in 4-8 years? Rent, don't like to save for a new a/c or plumbing or roof? Then rent, you just call the landlord. Do you work in a highly competitive field where moving firms is common? Then rent that way you can go where the work it optimal and not get stuck commuting 4 hours a day because you bought. You don't have to rent a condo or an apartment, rent a house. Yes, your rent may be the same as a mortgage, but it won't include all those expenses and savings and taxes and HOA and increase property insurance (renter's insurance is dead cheap!) Finish out your lease and walk away, find something closer, bigger, smaller better suited to your needs.
July 24, 2014 at 1:15PM     
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