Don't overpay your Agent: First-time homeowners are most at risk of overpaying on their house.

For the record “are agents worth 6%?” is not what I want to talk about. There are clearly many many people who think the answer is no and working on solutions to change that. Many years and lots of money has been spent by some incredibly smart people trying to change the economics of real estate.

Why? Because those people are just recounting their experiences, all of which included an agent. Point being, there is an incredibly strong social pressure to use an agent, since everyone else has — and you don’t want to be the sucker who tried to do it on your own, and got screwed out of $50,000 or $100,000 (or some other high $$ amount).

Buying a house is the biggest financial transaction most of us will ever make, and people can experience both positive and negative outcomes for decades afterward. The most important factor that determines whether the purchase was a success is the value of the home. After all, whether the price was $100,000, or $1,000,000, paying too much for a property is a bad deal.

The first red flag home buyers should be aware of when it comes to getting a fair price are the prices of homes in the same or similar neighborhoods. Rather than looking at what comparable homes are valued at, buyers should instead look at what people actually paid for similar homes most recently.

If a home is significantly more (or less!) than comparable homes in the nearby area, make sure to ask your realtor or real estate agency why. Depending on their answer, you may be able to negotiate a price more in line with the area's present market value.

A real estate agent will also have comprehensive knowledge of the market, allowing them to tell you exactly what a fair price is in the area you're looking at. When it comes to the life-altering decision of buying a home, sometimes it's simply easier to leave it to the professionals.