When it makes sense to overpay for house

No one likes to overpay for a home, particularly in a soft market. Yet, even in the current beleaguered housing market, there are pockets of strength. In these areas, buyers can find themselves in competition. Multiple offers can drive the price up, but not always.

Most buyers today are looking for bargains. Foreclosure listings, particularly at the low end of the market, are selling to investors and first-time buyers. As home prices dropped, affordability improved, which made it possible for first-timers to make the move from renting to buying.

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