When you look at real estate, there are factors you need to consider. For instance, you need to understand how much a property is worth, not just what the owner wants to sell it for. It's also vital that you know about supply and demand. If demand is high in an area, then the seller may be able to ask for more than if he or she is selling a property when demand is low.
Remember that even if a home sold for more several years ago than it's listed for now, that doesn't mean the home is worth what it used to be worth. Markets change. The economy changes. When that happens, homes may increase or decrease in value.
One thing to consider when you purchase a home or rental property is the location. Look at how the location is changing and what to expect over the course of the next few years. Will the area become more depressed? Is it going to be home to a bustling local economy? It makes a difference when it comes to your home's value.
Cost is never the only thing to consider when you look at a property. It actually should be compared to the overall value of the property compared to your needs. It's not at all unusual to find similar properties several miles apart for very different prices.
When you're ready to purchase a property, it's a good idea to look into creating a solid contract that you can trust. You want to protect your interests and make a healthy financial decision.
Source: Independence Title Company, "What factors are important when looking at real estate?," accessed March 15, 2018