The short answer is this: compare the house to similar homes nearby that actually sold in the last few months, not to the ones still for sale. If the list price sits well above those sold prices and the house isn’t clearly better, it’s probably overpriced. I’m David Knapp, associate broker with StillWaters Realty Group at Keller Williams Auburn-Opelika, and this is how I check a price before any buyer of mine writes an offer.
Every list price is an opinion. Sold prices are the market’s answer.
How do I know if a house is overpriced?
A seller and their agent pick the list price. Sometimes it’s based on good data. Sometimes it’s based on what the seller owes, what they need for their next house, or what the neighbor asked two years ago. The market doesn’t care about any of that. It only cares what buyers have actually paid for homes like this one.
So when a buyer sends me a listing and asks, “Is this overpriced?”, here’s what I would look at:
- What similar homes close by sold for recently
- How long this house has been on the market compared to the homes around it
- The full price history, including any time it came off the market
- The listing photos
- The condition of the big-ticket items
No single one of these tells you the whole story. Put together, they almost always do. Each one is broken down below.
What are comps, and why do only sold homes count?
Comps (short for comparable sales) are recently sold homes that match the one you’re looking at as closely as possible. Same general area, similar square footage, similar age, same bed and bath count, similar lot, similar condition.
There are three kinds of listings you’ll see, and only one of them is a fact:
- Active listings tell you what sellers hope to get.
- Pending listings tell you a deal was made, but the final price usually isn’t public until it closes.
- Sold listings tell you what a buyer actually paid, at closing.
Location matters more than people think. In Opelika, a house near historic downtown off Railroad Avenue and a house in one of the newer subdivisions can have the same square footage and sell for very different money. If the comps don’t match the location and the style, they aren’t comps.
What about Zillow and the other online estimates? They’re a starting point. They’ve never walked through the house, they don’t know the roof is new or the HVAC is original, and they can be off in either direction. Ask your agent for a real comp report pulled from the MLS. Make sure they know what they’re talking about, and ask them to walk you through why each comp was picked.
How long has this house been on the market compared to the ones around it?
Days on market is how buyers vote on a price without saying a word.
If similar houses nearby are going under contract and this one is still sitting, the buyers who have already toured it looked at the price and passed. That doesn’t automatically mean it’s overpriced, but it’s the first question I ask.
There can be other reasons a house sits. Showings might be hard to schedule. It might be tenant-occupied. The photos might be bad. It might have hit the market right before a holiday. So ask why. A good listing agent will tell you.
One more thing: in many systems the days on market count can reset when a listing is pulled and put back up. Ask your agent for the total time on the market, not just the current listing’s count.
What does the price history tell me?
The price history shows every change since the house was first listed. Look at it before you fall in love with the house.
- One price reduction usually means the seller is listening to the market.
- Several small reductions over a long stretch usually means the seller is chasing the market down instead of meeting it.
- A listing that expired or came off the market and went back on tells you even more. Sometimes it’s a fresh start with a better price. Sometimes it’s the same price with a new listing date.
Your agent can pull the full history from the MLS, including past listings at the same address. That history also gives you something to work with when you negotiate, because you’re talking about facts instead of feelings.
What can the listing photos tell me about the price?
I was an art major before I was a broker, so photos are the first thing I notice on any listing.
Look at the season. When the yard in the pictures shows green leaves and the trees outside your window are bare, those photos were taken a while ago. Old photos can mean a house has been on the market a long time, or came off and went back on.
A few other things I look for:
- Rooms that aren’t pictured at all, especially kitchens and bathrooms
- Furniture in the photos when the listing says the house is vacant
- Very wide-angle shots that make small rooms look large
- Exterior photos that crop out the roof or the neighbors’ lots on either side
None of this proves a house is overpriced. It tells you which questions to ask before you write an offer.
Does condition change what a house is worth?
Yes, and it’s where an overpriced house usually hides. Two homes can match on bedrooms, baths, and square footage and still be worth very different money because one needs a roof and the other just got one.
The big-ticket items I check first are the roof, the HVAC system, the water heater, the foundation, and the windows. Ask for the age of each one. If the seller doesn’t know, that’s an answer too.
Then compare condition to condition. A house with an original kitchen shouldn’t be priced like the house down the street that was fully updated before it sold. If it is, the price is leaning on the comps without earning them.
Don’t count on the seller to point out every problem. Get a full home inspection from someone you trust, and if they flag something big, get a specialist out before your inspection period ends.
What happens if I offer more than the appraisal?
If you’re using a loan, your lender will order an appraisal. The appraiser looks at the same thing I’ve been telling you to look at: recent sold comps. That’s why an overpriced house is risky.
If the appraisal comes in lower than your contract price, your lender bases the loan on the lower number. Depending on your contract, you usually have a few choices: bring the difference in cash, renegotiate with the seller, or walk away. Every contract is different, so read yours closely.
Talk to your lender before you write an offer on a house you think might be priced high. They can tell you how an appraisal gap would affect your loan and your cash to close. I’m not a lender, and this is the part where you want one in the conversation early.
The mistakes buyers make on an overpriced house
These are the four I see most often.
- Offering off the list price. “They’re asking 300, so 290 feels like a deal.” It’s only a deal if the house is worth 290. Start from the sold comps, then look at the list price.
- Using active listings as comps. A house down the street asking more doesn’t make this one a bargain. Two sellers can both be wrong.
- Falling in love before checking the numbers. It happens on the first showing, right? Then every red flag starts looking like character. Pull the comps before the second showing, not after the inspection.
- Lowballing without data. What you don’t do is throw out a low number with nothing behind it. Sellers get defensive and stop listening. An offer backed by sold comps, days on market, and the price history gives the seller’s agent something real to take back to their client.
What should I do next?
Send me the listing. I’ll pull the sold comps, the full price history, and the days on market, and I’ll tell you what I would offer and why. That goes for Opelika, Auburn, Phenix City, Columbus, or anywhere else I work in East Alabama and West Georgia.
There are a lot of moving parts in buying a home, and price is the one you can check before you commit to anything. Do that part right and the rest of the deal gets a lot easier.
About David Knapp
I’m an associate broker with Keller Williams Auburn-Opelika and the team leader of StillWaters Realty Group. I’ve been selling real estate for five years and investing in it since about 2015, so I look at every house the way a buyer and an investor would: what’s it actually worth, and what will it cost to own? I work across East Alabama and West Georgia, from Opelika and Auburn to Phenix City, Columbus, and the Fort Benning area. One buyer summed it up in a Google review: I “gave honest advice.” That’s the job.
Ready to check a house?
Book a time with me at calendly.com/davidknapp-kw/initial-consult, or call or text 334-750-1700.
StillWaters Realty Group at Keller Williams Auburn-Opelika · 334-750-1700 · 1747 Ogletree Rd, Suite C, Auburn, AL 36830 · AL License 044998 · stillwatersrealtygroup.com
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