15 Signs the Home You Are Buying Isn't Worth Its Price

Buying a house is a major financial decision, so you want to be absolutely sure you make wise choices. Specifically, it's important to avoid paying more than the house is worth.

Purchasing a home for more than it's worth will make it hard to sell the property or refinance your loan later. And you'll have to hope the property appreciates before you sell so you don't lose money on the deal.

But how can you make sure you don't overpay? Watch out for these 15 signs that suggest the home you are buying may not justify its price.

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It's common for homes to sell within a few weeks of being listed or even a few days in hot markets. When a home has been sitting on the market for a long time, it usually indicates a problem -- and often, the issue is that it's priced too high. You don't want to be the buyer who ends up paying that inflated price.

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When a seller accepts an offer, the home goes into pending status; if it falls through, it reverts to active. When this happens, it often means there is a big issue.

Whether that's an inspection problem, the home not appraising for what was offered, or something else entirely, this is a red flag that the house might not be worth its asking price.

If houses priced similarly aren't selling, there's a good reason. It probably means they are all overpriced. You can check out similar listings on the multiple listing service (MLS) to determine whether buyers are passing them up because of the inflated costs.

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You don't want to buy the most expensive house in the neighborhood. Even if the house itself has some added features to justify the cost, you won't see your property value rise as quickly. So check out what similar homes nearby have sold for, and if the one you are interested in is not in line with their prices, walk away.

Viewing home listings online makes it much easier to determine whether a home you are interested in is priced reasonably. You can search online databases for similar homes in similar neighborhoods.

Compare the features and prices to get a good idea of whether you are paying what a home is worth.

If homes with similar features tend to sell for less, it's a good indicator you're at risk of overpaying for the one you're interested in.

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It's usually a bad sign if the sellers recently bought a house and are relisting it for much more than they paid. They could be house flippers hoping to make a quick profit. But that could mean they did quick, shoddy cosmetic upgrades that don't actually justify the big cost increase.

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It could be a major sign that the house isn't worth its cost if you discover big problems during the inspection. You would have to pay to fix these issues upon moving in, which adds a lot to the final price tag. Consider walking away if the seller isn't willing to make the repairs or drop the price.

You can determine how much a home costs per square foot by dividing the price you're paying by the total square footage. You can then compare this number with other similar properties.

Square footage is usually a huge factor in determining what a home is worth. If your house is priced highly based on size, you may be paying more than you should. Other features the home offers may not justify this inflated cost if the home simply is not large enough to justify it.

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Many online websites estimate a home's worth. While these aren't always exact, the algorithm used to determine what a property should cost is fairly accurate. You can use these numbers to at least get a ballpark figure.

If the price you're thinking about paying far exceeds the online estimates, you are probably getting a pretty bad deal.

School districts generally have a huge impact on property value. It's important to pay attention to the district's reputation, even if you don't have kids. In many places, paying a lot for a house in an area with poor schools is not worth it, even if the home seems nice otherwise.

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A neighborhood with lots of crime will negatively impact property values. You don't want to pay a high price for a home -- even if the house itself seems nice -- if the area has a reputation for unlawful activity. Not only will it be hard to sell, but you could also end up worrying every time you leave the home, which just isn't worth it.

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If property values in an area are falling, you could end up paying more than you should if you buy a house in that location. You can usually get a good idea of whether a neighborhood is on the decline by looking at foreclosures, boarded-up buildings, vacancies, recent sales, and stores and amenities closing.

Your mortgage lender will typically require you to get the home appraised before you can close on a loan. An appraiser will provide a professional evaluation of your home's worth.

If the appraisal shows it is worth less than you are paying, it's a huge red flag you can't ignore -- especially since your lender won't ignore it. You'll likely want to walk away or negotiate a lower offer. Otherwise, you'd probably need to bring more cash to the table to move forward.

ALSO READ: Home Appraisals: What to Know, How Much It Costs, and How It Works

Homeowners association (HOA) fees can sometimes be very high. If they add a lot to your monthly payment, you need to consider this when looking at the home's total cost. It may not be worth buying once you factor in the HOA expenses.

You should also consider the insurance costs. The risk may be very high if a home is in a flood- or disaster-prone area. You may have to get special insurance and pay a fortune for it. This also adds to your total ownership costs and must be factored in when deciding whether a home is worth its price.

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By looking for these 15 red flags, you can avoid overpaying for a home. Putting in the time to research the property and the area can help you to pay a fair price for a property. The effort is worth it for one of the biggest purchases of your life.

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