What Homebuyers Need to Know to Avoid Overpaying in 2025

Things have changed in 2025. According to recent research from Redfin, there are now 33.7% more sellers than buyers. Inventory is piling up—partly because many sellers are still overpricing their homes using outdated comps from the hot pandemic-era market.

At the same time, many buyers hit pause due to affordability concerns and ongoing economic uncertainty. But if you were one of those who stepped back from house hunting—frustrated by bidding wars and waived inspections—now might be the right time to return.

We’re in a buyer’s market.

That doesn’t mean homes are suddenly cheap. It means sellers are more open to negotiation and the days of aggressive bidding may be behind us (with some exceptions). But to make sure you don’t overpay, especially in a shifting market like 2025, here are 6 key strategies every smart homebuyer should follow:

1. Don’t rely solely on asking prices

In May 2025, the median list price in Philly rose to $298,569, but the median sale price was much lower—around $250,000—indicating that many homes are selling below asking. To avoid overpaying, review recently closed sales in your target neighborhood using the Multiple Listing Service (MLS). Focus on sales within the last three months and within a one-mile radius.

A knowledgeable agent can help you access off-market comps and spot pricing outliers, making sure your offer reflects the true market value—not just the list price.

Also, pay attention to how long a home has been on the market. If a property has been sitting for 60+ days or has gone through multiple price reductions, it’s often a sign you can negotiate—typically 3% to 5% below asking—without risking the deal. This isn’t about lowballing; it’s about making a fair offer based on market evidence.

In tighter submarkets where inventory remains low (like parts of Northeast Philly), you may need to limit contingencies to stay competitive. Still, broader signs of a cooling market can give you room to negotiate a more balanced deal.

2. Don’t Skip Contingencies That Protect You

In a buyer-friendly market, sellers are often more open to reasonable contingencies—so take advantage of that.

Include a home inspection contingency, an appraisal contingency, and a financing contingency whenever possible. These protections give you the option to renegotiate or walk away without losing your earnest money if something unexpected comes up—like a failing HVAC system or a low appraisal.

While waiving a home inspection can be a common strategy to win in competitive, multiple-offer situations, it’s not worth the risk when the market favors buyers. If an inspection reveals major issues, you’ll have solid grounds to negotiate the price or ask for repairs—helping ensure you don’t overpay for a home that needs expensive fixes.

3.Lock in a Competitive Mortgage Rate Quickly

Mortgage rates remain elevated in 2025, with forecasts from Fannie Mae and Goldman Sachs projecting average rates between 6.3% and 6.75% by year’s end. Even a small rate difference—just 0.25%—can add up to tens of thousands of dollars over the life of your loan.

To protect your buying power, get preapproved early and compare offers from at least three lenders. Waiting too long could mean locking in a higher rate, which may shrink your budget or push you to overpay just to get the home you want.

4. Get a Second Opinion with an Independent Appraisal

In 2025, home price growth in Philly has slowed to about 3.4% year-over-year—and some ZIP codes are seeing price declines. With appreciation expected to taper to around 2% nationally (according to Bankrate), it's more important than ever to ensure you're not overpaying in a shifting market.

If the seller’s price seems inflated or you're unsure about the property’s value, consider hiring your own independent appraiser. This is especially useful in neighborhoods experiencing fast-changing dynamics—like East Kensington (median $342K) compared to nearby West Kensington (median $197K).

If your independent appraisal comes in below the contract price, your appraisal contingency gives you leverage to renegotiate—or walk away—without penalty. It’s a smart safeguard that helps you avoid overpaying in a cooling market.

5. Shop Around for Mortgage Lenders

Once you’ve chosen your loan type, request Loan Estimates from at least three lenders on the same day. Rates fluctuate daily, so same-day quotes help you make a fair comparison.

Don’t just compare interest rates—look at origination fees, closing costs, and estimated monthly payments.

In Philly’s market, where affordability is a real concern, a better rate could be the difference between a comfortable monthly payment and financial strain.

6. Work with a Local, Experienced Real Estate Agent

In today’s evolving market, working with a local expert is more important than ever. A seasoned agent who understands your specific neighborhood can help you navigate the fine details—like which submarkets are cooling, which are holding steady, and where sellers are more open to negotiation.

For example, while homebuilding has slowed in some regions, high immigration between 2021 and 2025 helped stabilize labor supply and supported pricing in many urban markets (Goldman Sachs, Business Insider). An experienced agent will spot undervalued pockets, identify sellers with realistic expectations, and help you avoid bidding wars—especially in areas where inventory is rising.

Simply put, a good agent can save you serious money. They’ll ensure your offer is competitive but not inflated, and negotiate terms you might not realize are on the table.

Ready to Buy Smart and Avoid Overpaying? Let’s Talk!

With so much changing in Philadelphia’s market, having the right guidance makes all the difference. Whether you’re just starting your home search or ready to make an offer, our local experts at Venture Philly Group are here to help you navigate 2025’s unique market conditions.

We’ll provide personalized advice, access to up-to-date data, and strong negotiation skills to make sure you get the best value—without overpaying. Don’t go it alone in this shifting market!

Contact us today to start your homebuying journey with confidence.

Let’s find the perfect home for you at the right price.

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