Should I Ever Overpay for My House?

“Is it smart to pay above appraised value for a property?” This is the question I got from a client in Centreville. Honestly, it is a pretty personal question and the best answer I can give, unfortunately, is it depends. In some instances, paying above appraised value absolutely makes sense. And in others, it definitely does not.

When my wife and I bought the house that we plan to be in for 20 years or more, I knew that we were overpaying for it. It was a calculated risk for us and I was okay with it because I knew we were going to be in this property for a long time. This was the specific house we wanted. We did not want the one next door or the one on the other side. We wanted this one. Knowing that I was overpaying a little bit was something I was willing to do because we are going to be here a long time. Also, reselling it, even if we overpaid for it 20 years earlier, will not be a huge issue. 

On the contrary, moving into a two-year or a three-year home might be a little bit of a different story, because if you are overpaying upfront, then you cannot be positive that you are going to be able to walk away without losing money or at least breaking even. And so, it becomes a little bit more of a question if you are going to stay in the house for a very short amount of time. 

Definitely chat with your real estate agent about it. Chat with your significant other and find out what is the best move for you in your particular situation. If you ever have questions, never hesitate to call 571-393-1082 or email [email protected].