3 Obvious Signs a Home Is Overpriced

By Nick Kellar

Nick Kellar is a dedicated real estate consultant, investor, and community steward serving Baltimore and the surrounding areas.

As you browse home listings, you might find yourself thinking, “Wait, how much are they asking for that house?” This is a common reaction, especially when some homes stay on the market longer than usual, say more than a few weeks. If that’s the case, it’s likely overpriced. Here, we’ll look at three key signs that a home is overpriced and why these listings can actually be a great opportunity for buyers.

1. Lengthy time on the market. If a house has been on the market for more than two to three weeks, especially in areas like Baltimore and Carroll County, where homes usually sell faster, it’s a strong sign that it is overpriced.

Today’s buyers are well-informed and good at comparing prices. A home that stays on the market too long raises red flags, making potential buyers wonder if there’s an issue with the property or if they should wait for a price drop.

2. Frequent price drops. Have you ever seen a listing go from $500,000 to $485,000 to $470,000, with the seller claiming to be “motivated”? This usually means the home was overpriced from the start, and sellers are now trying to catch up with the market.

While many home sellers mistakenly think they can list high to test the waters, this strategy often drives buyers away. Homes that undergo several price drops typically sell for less than if they had been priced right from the beginning.

3. Mismatch between photos and price. Imagine a listing that boasts a “luxury mansion,” but the photos show outdated decor from the ’90s. If the description is a confusing mix of adjectives, it’s a big red flag.

A home priced at a premium should look the part. This means updated finishes, modern staging, and high-quality photos. When buyers see things like worn oak cabinets and carpeted bathrooms, they quickly lose interest, especially when those cringe-worthy “boob lights” are often found in older homes.

Bonus tip: Another clear indicator of an overpriced home is how quickly neighboring properties are selling. If similar homes in the area are moving fast while one listing remains stagnant, it usually points to an inflated price.

Savvy buyers know how to compare listings and analyze details side by side. If one house is priced significantly higher than comparable properties without a good reason, it will be ignored.

Why consider buying an overpriced home? Despite the red flags, there are valid reasons to consider purchasing an overpriced home. With the opportunity to negotiate and secure terms favorable to you, such properties can often be purchased at a discount, potentially offering immediate equity, which is challenging in today’s market.

Affordability remains the primary hurdle for many homebuyers. A $10,000 to $12,000 closing cost can substantially reduce your interest rate and increase your chances of securing a home from a seller who is still engaged with the market. You may worry about the costs for necessary home improvements, but numerous financing or loan options exist to minimize out-of-pocket expenses. Furthermore, this can be a chance for buyers to invest in their new home and take pride in the updates made.

When house hunting, being vigilant for these overpriced red flags can prevent you from overpaying. Conversely, if you’re selling, it’s crucial to price your home appropriately from the outset, especially as market dynamics shift.

Have you recently encountered an overpriced home? Share your experiences and the most outrageous listing prices; I’d love to hear about the wild listings making the rounds. If you ever need someone to talk to about real estate or anything else, reach me at (443) 375-2224 or via email at nick@storyline-homes.com. Together, we can look through the details of the real estate market and avoid overpriced traps.