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February 12th 2009

Five Simple Ways to Avoid Paying Too Much For a Home.

Don't let the sharks get you.

There are a lot of great values in the current real estate market, but it’s still possible to pay too much for a home. Here are a few simple things you can do to avoid making bad decisions.

1. Focus on the numbers. When making an offer, ask your agent to show you every like kind home that has closed recently in the area near the subject property. You’ll then come up with a target price. When making your offer, start off well below your target number and adjust accordingly. Never go above your target price.

2. DO NOT GET INVOLVED IN A MULTIPLE OFFER SITUATION. You’ll get sucked into the drama of the whole thing. If you lose you’ll be pissed. If you win, you’ll feel like you paid too much — and you probably did. If you absolutely must put in an offer — never go above your target price. Stay strong.

3. If someone tells you that “A house is worth as much as you are willing to pay for it.” Walk the other way. This is the biggest line of BS that I have ever heard. There are a lot of families who are upside down right now because they let their emotions get involved in the bidding process. My feeling is that a house is worth as much as the next buyer is willing to pay.

4. Do not try to keep up with the Joneses. You can afford what you can afford. Get into the market — don’t let the market get you.

5. Think with the end in mind. Look for a property that you will be able to resell easily. If the only thing you like about a property is the price, you may want to reconsider.

*6. Special Bonus. Ignore the beautiful furniture and artwork. Focus on the bones of the house. Homes that are staged well tend to sell for more. Sometimes a lot more — so be careful.

Happy house hunting.

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