"Don't Buy This One": Why I Sometimes Talk Buyers Out of Houses

Part of: The Complete Guide to Buying a Home in Montgomery County, MD

One sentence I say to buyers more often than you might expect:

"I'll help you buy this house if you want it, but I don't think it's a good idea for you to buy this one."

Agents are usually paid when you buy, so it can sound strange. But my job isn't to get you into a house. It's to help you buy the right house at the right price, and that sometimes means telling you to keep looking.

What I check before saying "go" or "don't"

1. Comparable sales, not list prices. List prices are the seller's opinion. What matters is what similar homes nearby have actually sold for recently: same subdivision or a comparable one, similar size, age, layout and lot. I look at what sold, how long it took, and what it sold for compared with its list price. (You can check a home's own sales history and assessment through Maryland's SDAT real property search; here's how to look up Montgomery County property records.)

2. Condition compared with those comps. Two houses can have the same square footage and very different values. If a home needs a new roof, an HVAC system, a kitchen or a bathroom, and it's priced like the renovated house down the street, the math doesn't work.

3. How long it's been on the market, and why. A home that has sat for weeks at the same price is telling you something. Sometimes it's overpriced. Sometimes the seller is getting motivated. Both are useful to know.

4. The real cost of fixing things. "Needs a little work" can mean $3,000 or $60,000. When it matters, I bring my preferred handyman or a contractor to give real numbers, so you can decide based on real costs instead of guesses.

5. Your monthly payment, not just the price. With rates where they are, every $10,000 of price changes your payment. A house that's "only" $20,000 overpriced costs you every month for years. (More on that: buying when mortgage rates are high.)

What this looks like in practice

A recent first-time buyer and I toured about 25 homes over four or five outings. Several looked great until I ran the comps. They were priced well above what similar homes in similar condition had sold for, so I told him so.

Then we found one that was different. It was listed at $545,000, and similar homes in the same subdivision had sold for $560,000 and $570,000 in the previous six months. That's the opposite situation: a home priced below its comps, with a seller ready to move. We moved fast, negotiated hard, and he bought it for $515,000. (Read the full case study.)

Walking away from the wrong houses is what made it possible to recognize the right one immediately.

If you love a house anyway

It's your home and your decision. If you love a house I have concerns about, I'll tell you why, and then I'll help you buy it and negotiate the best price I can. Honest advice and full support aren't in conflict.

Frequently Asked Questions

How do I know if a house is overpriced?

Compare it with what similar homes nearby actually sold for recently, not with other list prices. Then adjust for condition (a dated kitchen or an old roof matters), look at how long it has sat at the same price, and get real repair numbers for anything it needs. If it's priced like the renovated house down the street and it isn't one, it's overpriced.

Should I buy a house my agent says is overpriced?

It's your decision. A good agent will tell you why they have concerns, then help you buy it anyway and negotiate the best price they can. If you love it, go in with your eyes open about what the comps say and what that gap costs you every month.

What are comps in real estate?

Comps (comparable sales) are similar homes nearby that sold recently: same or comparable subdivision, similar size, age, layout and lot. They show what buyers actually paid, which is why they matter more than any list price when deciding what to offer.

The bottom line

The best thing a buyer's agent can give you is honest advice backed by data. Sometimes that's "let's offer tonight." Sometimes it's "let's keep looking."

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Edward Dumitrache, REALTOR® · Pearson Smith Realty · Licensed in MD, DC and VA