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Money Fix: overpaying for housing

Home sweet home is where people sometimes take

Home sweet home is where people sometimes take on more than they can afford, whether renting or buying. Overpaying is a crucial mistake, because housing is typically one's largest monthly expense. Photo Credit: iStock

Home sweet home is where people sometimes take on more than they can afford, whether renting or buying. Overpaying is a crucial mistake, because housing is typically one's largest monthly expense.

Here's how to keep your cool and get the apartment or home you want, without regrets.

Decide what matters: Put together a list of the features you're looking for. Distinguish needs from wants. "It's easy to fall in love with a place and lose sight of what is really important. Thinking through priorities in advance helps keep you from getting carried away later," says Max Galka, CEO of Revaluate, a Manhattan company that rates apartment buildings in New York City.

Know what you can afford: Set a budget and stick to it. You don't want to stretch every month to make payments.

Know the market: When you look at your wish list, find out what similar properties and apartments are going for in your dream location. Review market trends.

Be ready to strike: If you're buying, "get prequalified, make the deal quickly, respond to counteroffers within hours," says Diane Saatchi, a real estate broker with Saunders & Associates in Bridgehampton.

Avoid bidding wars: Winners often overpay.

Capitalize on flaws: You want a home you can be proud of, but a house or apartment with a flaw that's not fatal may mean you'll pay less, points out Doug Perlson, founder of Manhattan real estate brokerage RealDirect. If the flaw is something like an outdated kitchen, fix it later if you're buying. If a rental is in a neighborhood you're not wild about but it's a great apartment at a great price, compromise.

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