Is there ANY reason people should “OVERPAY” for real estate?
Interesting question and you will probably find my response interesting. In the market I am in at this TIME, there are more buyers for properties than there are homes available. It if not uncommon for well priced, good located, well staged homes to sell quickly (sometimes within a day or two) and possibly experience multiple offers? I also have clients and/or potential clients that for last TWO YEARS OR SO have been waiting for the market to “stall” or “crash.” These clients have watched the market appreciate in some areas 20%+! How much money have you lost waiting on the sidelines?
The first thing in my opinion to review on “overpay” is what does that mean to you personally? I am not talking about exaggerating amounts meaning a properties appraised value is probably $500,000 and the seller is asking $700,000. I talking about a property within reason is priced on the higher side of the market or the higher side of your personal price range. I would first ask you what is your vision for the property? What do I mean by that? Why would consider purchasing it and how long in a perfect world would you want to live there?
The property may have value to YOU that it would not have to someone else. Are you purchasing this home to live in an area because your kids HAVE to go a particular school or does it have enough room to accommodate aging family members that may have to move in? Does it allow for enough space to grow in? Is it a place you want to stay in until retire? Is this the last home you want to purchase?
These are things that only YOU can answer and only YOU can put a price tag on. Lets suppose a property has everything that meet your needs and it is the only one available or the only one SUITABLE FOR YOU and you really like it. Lets now say you purchased the property for $500,000 but you feel or really didn’t want to pay over $475,000 for it. NOW fast forward 10 years and let say the property is now worth 1 million dollars. After living in it, enjoying it, meeting all your family needs, would you really care that you paid $25,000 more for the property? That is a question only YOU can answer but the answer should be NO YOU DON’T CARE! In that scenario did you really “OVERPAY.”