The housing market has cooled off a bit since interest rates went back up, but that hasn’t prevented homes from being commonly overpriced — due in part to the housing shortage along with inflation.

                By                    Nicole Spector

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So, how can one tell if they’re getting taken for a ride by their local real estate market, and what are the signs that you’re paying too much for your new home?

1. It’s Been on the Market Forever

Expecting a price drop since that house has been sitting on the market for months and months? The price could be the reason it’s gone unsold for as long as it has. If you’re shopping in a neighborhood where all the homes are $250,000 and this one is no different but lists at $300,000, you may be overpaying if you purchase it. 

2. It Recently Sold for a Lot Less Money

Did the house you’re eyeing sell in 2021 for significantly less than what it’s listed for now? If you don’t know, find out by researching the address on RedFin or Zillow. Unless drastic renovations have been made since the home last sold, a major price spike could indicate a rip off in the making. 

3. It Bounces In and Out of ‘Pending’ Status

Is the house sold or isn’t it? If a home listing keeps bouncing back and forth between “pending” and “for sale,” something is probably amiss. One issue could be that the prospective buyer learned the house appraised for less than the listing price.

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4. It’s Got Major Issues

Foundational cracks? Roofing issues? Plumbing problems? A home inspection reveals the deep and ugly secrets that even the most beautiful home may be hiding. If you’re considering buying a house that has serious flaws, you may be seriously overpaying.

5. Schools Are Lousy

Sadly, the best public schools tend to be in places with the highest property taxes — including where homes sell for the most. If you’re paying a fortune for a house and find out the nearby schools are not so hot, then you’re definitely overpaying and should steer clear.

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6. Crime Runs Amok 

You should get a pretty good sense of whether you’re in a “good neighborhood” just by walking around the area. Regardless, you should always look up the crime rate in any location you’re considering living in. If you’re buying a home in a place where you’re afraid to turn the lights off at night or feel you can’t park on the street, you’re overpaying. Frankly, nothing is worth feeling unsafe.