How to Know If You're Paying the Right Price for Your Home

1. CONSIDER THE NEIGHBORHOOD.

Location really is everything when it comes to a good real estate investment, so if you bought in a great area odds are you’ve made a good investment and your home’s value will appreciate over time. Ask your agent to show you “comparables” of what other homes in the area sold for and are valued at.

2. PAY ATTENTION TO THE INSPECTION REPORT.

If the inspection report comes back with any issues that will require a major investment to repair, this should be reflected in the price you pay for the home. If the owner didn’t pay for the repair, that cost should come out of the purchase price.

3. USE AUTOMATED VALUATION MODELS (AVM) TO GET AN IDEA OF THE VALUE OF YOUR HOME AND THE NEIGHBORHOOD OVER TIME.

Ask your real estate agent to recommend a couple they believe are most accurate. The AVM may reveal that while you feel you’re paying too much, the appreciation in a few years’ time makes the investment well worth it.

4. TAKE YOUR PERSONAL CIRCUMSTANCES INTO ACCOUNT.

Ultimately, what you pay for the home has everything to do with your personal situation. If the location is extremely important to you, or the design or style is your absolute dream home, then the price is worth it.

Taking all these factors into consideration can provide you great peace of mind or provide some necessary concern. Work with your real estate agent to determine whether you’re paying the right price – they will keep your mind at ease and provide helpful guidance.

It’s also important to consider how long you intend to live there. If you’re in it for the long haul, odds are you’ll regain your investment. If you’re there for a shorter term, being able to make a quicker profit or rent will be very important. Your personal situation is a critical factor in the price you’re willing to pay.